It is necessary to perform thorough research before selecting an accredited business valuation company. Getting acquainted with a company’s valuation methodologies and making sure that they have a strong understanding of the industry will definitely result in a fair and positive business valuation.
Company integrity, credibility, knowledge, experience, and overall service are some of the biggest factors that should be considered when choosing a business valuation company. This is to ensure that the company that you’ll be hiring will be able to meet your specific needs.
A certified business valuation by an accredited Business Appraisal Florida team member is one of the best examples of a top-notch service that every business owner should seek when planning to sell a company. However, there are several differentiating factors that put one company above another in terms of efficiency, experience, credential and overall service. A multitude of important considerations should be taken into account when deciding which business valuation company you’re going to hire when you decide to sell your business.
Furthermore, 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:
1. Investment Bankers
An investment banking company determines your highest possible value for a synergistic buyer. Many times they will have CVA’s in-house or use a third party Accredited Valuation Firm.
2. Divorce Attorneys
Florida is one of 35 US states where personal goodwill can be deducted from marital assets. You need to know how your personal goodwill impacts your value for marital dissolution as it can be 25-50% of the total business valuation.
3. 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 with any significant information about how to increase the value of your business in the years to come.
4. 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 overpay for too much life insurance.
5. Certified Public Accountants
Your CPA helps you determine an appropriate asking price, but as one of your paid advisors – who are not accountable for actually getting you that value – can you rely upon that figure as truly unbiased? In addition, if your CPA supplies you with your yearly audited financials, they cannot also Value your company.
6. Certified Business Valuation Companies
A highly qualified and reputable firm experienced in Litigation Support, Estate, and Gift Tax valuations can accurately defend your marketability and minority discounts in a Shareholder dispute or to the IRS. In addition, they are also capable of identifying your unique competitive advantage to exploit a higher value for a sale to a strategic acquirer.
Accreditation, Experience, and Cost
Although there is a range of things to consider when choosing a business valuation company, accreditation, experience, and cost are the most significant factors that you should never lose sight of.
Accreditation. Take note that a certified business valuation by an accredited business appraiser should be your utmost priority. An accredited expert can easily show that he or she has advanced experience and knowledge. These aspects are required to deliver reliable and quality business valuations.
Experience. An experienced business valuation company has access to the latest economic data and relevant information that can potentially support valuation discounts if applicable. The more assets a highly experienced business appraisal company has, the greater it can help you get the right value of your business.
Cost. Business valuation costs may vary greatly and may depend on the size of the company, the purpose, the nature of the valuation methodology, and the difficulty of the company’s operations.
What Can Business Appraisal Florida Provide You?
Business Appraisal Florida will provide you with a reality check! We will decide if the valuation of your company makes sense in the real world. We have a certified team of accredited business appraisers who can carry out the valuation of your business. They are all capable of targetting the correct audience. For example, partners, family members, shareholders, potential buyers, IRS, estate planning, lenders, or potential equity investors.
“The key to receiving ‘value’ from your investment in a business valuation is choosing the appropriate purpose and appraiser for your engagement.” – Chris Curtin, CVA
Business Appraisal Florida, together with Bankers Advocate, has an appraisal product for every size of business and price point. Also, we have partners who have been appraising Inventory, Machinery, and Equipment for 25+ years.
*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.