The value of your business could vary widely both in cost and outcome depending on the purpose of the assignment and the qualifications and experience of your appraiser. Here are just a few examples to consider when making these critical choices (arranged from highest to lowest cost):
- Valuation Firms: A highly qualified and reputable firm experienced in Litigation Support, Estate and Gift Tax valuations might accurately defend your marketability and minority discounts in a Shareholder dispute or to the IRS, but are they capable of identifying your unique competitive advantage to exploit a higher value for a sale to a strategic acquirer.
- Investment Bankers: An investment banking firm determines your highest possible value, but you really needed to know how your personal goodwill impacts your value for marital dissolution.
- Your CPA*: Your CPA helps you determine an appropriate asking price, but as one of your paid advisors – who is not accountable for actually getting you that value – can you rely upon that figure as truly unbiased?
- Business Brokers: A business broker provides you with a range of value based on “rules of thumb” and market multiples prior to receiving your listing engagement. Will this value carry any weight with astute buyers once they know the broker is paid a commission on the selling price? Conversely, if the value is too low to justify a sale right now, will this “down & dirty” valuation provide you any meaningful information about how to improve the value of your business in the years to come.
- Financial Advisors*: Your financial advisor relies on your opinion of your business value for retirement planning and possibly purchasing life insurance to fund a buy/sell agreement. Many owners understandably hold “intrinsic value” in their business, which is typically inflated. The risk is you will come up short on meeting your retirement goals and over pay for too much life insurance.
Business Appraisals Florida works with business owners and their advisors as your one-stop resource for all your business valuation needs.
“The key to receiving ‘value’ from your investment in a business valuation is choosing the appropriate purpose and appraiser for your engagement.” – Nick Rodites, AVA
*We collaborate with many reputable firms that embrace our valuation and business exit strategies. For a referral to a CPA or Financial Adviser you can trust, please contact us.