How much is your business really worth? This question often has to be answered for owners of small businesses and privately held companies for many different reasons:
- Selling the Business
- Partner Buy-outs
- Mergers & Acquisitions
- SBA Financing
- Strategic Planning
- Estate Planning
- Gift and/or Estate Tax Valuation
- Employee Stock Option Plans (ESOPs)
We can assist in providing you with the proper business valuation to satisfy any of these requirements at any level:
- Opinion of Value – A quick estimate based on normal references.
- Value Analysis – Fair Market Value analysis for small businesses. This requires general financial information.
- Formal Valuation – This is an in-depth certified valuation that is very useful in buy-sell transactions and sometimes required for SBA financing.
- IRS 59-60 Valuation – This is used for estate tax, ESOPs, mergers and acquisitions of large privately held companies and for litigation.
A Brokers Opinion of Value, which is a snapshot review and estimation of value for the business. It is intended for informational purposes and can be used for marketing the business for sale, general financial planning, uncontested statement of value and other non-dispute related purposes.
Formal Valuations by an accredited valuation company, on the other hand, is a formal self-contained written report that involves much more in-depth analysis. Designed for larger businesses, this comprehensive report provides a thorough analysis of the Income Statement and Balance Sheet, Common Size Analysis, Comparable Transactions, and Industry and Economic Review. If a valuation has the potential to go to court, or if the report needs to be reviewed by others, such as the IRS for tax implications, this type of report explains in full detail how the value was derived. Uniform Standards of Professional Appraisal Practice (USPAP) and American Society of Appraisers (ASA) address the above as a “Comprehensive, Written Business Valuation Report”. The Institute of Business Appraisers (IBA) addresses the above as a “Formal Written Report”. Typical uses are as follows:
- Litigation support
- Large, complex transactions
- Initial implementation of an Employee Stock Ownership Plan (ESOP)
- Any matter where there are many “intended users”
Integra understands the needs of owners of privately held businesses and is here to assist in answering your questions on business valuations. If you require clarification or guidance on how to approach the subject of business valuation, simply give us a call and an expert will guide you through the process.