Business
Appraisal
Business Appraisals is the offshoot of a successful business brokerage firm, Business Search. As Business Search grew we were faced with a problem of how to accurately appraise the businesses we were trying to sell. There were many different accounting methods to do this but the range of value they presented was spread over such a large variance (+/- 500%) that they were unusable. By carefully analyzing what creates value in a business we were able to determine which approaches had the most merit.
We finally determined that it wasn’t a single method that worked but a blended method of a cash flow / asset value / market value that gave us the correct values we were looking for. We were then able to sell a business and work the numbers backwards into our method to determine the methods accuracy. Business Search has been using this method successfully for more than 25 years. Business Appraisals was created as a separate company to offer these same methods to individuals and corporations needing clear, accurate, and affordable business appraisals.
Conversions, other legal matters,
gifts and trusts and endowment.
There are several legal and other tax matters that may require a business valuation. If you need a business valuation for any reason, Business Appraisals can help you. We are certified by the NACVA, which is arguably the most credible business appraisal certification organization in the United States. Our valuations have been used in dozens of court cases, for the IRS, and for a whole host of other legal matters. Whatever your need for a valuation, we can help you!
Our process utilizes a very intuitive, and easy to understand method. Our valuation report is very easy to understand, and straightforward. Where many firms produce complex, and confusing reports, Business Appraisals will lay out your valuation in a straightforward report and will clearly articulate what has value and why. We are professional and easy to work with. We can also meet any deadline within reason. Give us a call and we’ll get going.
Purpose of the Business Appraiser’s Valuation
Sale of the company
Purchase of the company
Shareholder buy outs
Business loans
Estate valuations appraisal
Performance evaluations
Divorce proceedings
IRS required appraisals
Other legal requirements
Discounts for lack of marketability
Appraisal Format
Cover Page
Index
Appraisal Details
Appraisal Summary
Valuation of the Company
Methodology
Resume of appraiser
And the Copies of Documents Used for the Appraisal
We provide Business Appraisals in California and across the United States.
By simplifying the appraisal method, we are able to provide clients with a better appraisal at a lower price. We have devoted over 30 years to analyzing appraisal methods with the sole purpose of determining the key elements in businesses that contribute value. This simplification allows a more affordable pricing of our services.
With 30+ years of Valuation Appraisal experience, we have the expertise needed to provide our clients with clear, accurate and affordable Appraisals!
things the contribute to a Businesses’s value
Businesses are complex and there are many factors which contribute to their value. All factors must be taken into consideration and weighted properly in order to develop an accurate appraisal. Some of these factors include:
Assets
Equipment Condition and Useful Life
Inventory
Real Estate
Vehicles
Collectable receivables
Risks
Reputation
Pending Litigation
Debt
Purchasing Power (Cash + Credit)
Total Revenue
Liquidity
Written systems
In service Patents / Trademarks
New product development capabilities
Good Financial Management
Leverage
Critical Risk Factors
Number of Trained Employees
Repeat customers, Contracts,
Subscriptions
Age of Company
Number of Customers
Overall Profit Margin
Organizational growth trends
Market Factors
Economic Resilience & Beta
Market & Industry trends
Barriers to entry
Competition
Imminent Regulation
Our Unique
Approach
Business Appraisals is different from most valuation firms in that many such firms are run by accountants who have never bought or sold a company; we started as a business brokerage firm. Our methodology was created by business experts who have actual merger and acquisition experience. Our method blends the income and asset approach into a single, unified, objective system which weighs risk and value clearly and accurately.
Our hybrid approach also considers market and other risk factors to develop the profit multiplier. (See Multiplier section for more information)
This method is very consistent regardless of the subject company and does not lend itself to valuator bias.
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Why Our Methodology is So Accurate
What Business Appraisals LLC has discovered over three decades and thousands of appraisals, is real buyers & sellers are predominantly concerned with two main elements of business value: Assets and Cash Flow. For an investor, both are important, but they are fundamentally different when it comes to risk.