Business Valuations

What’s Your Business Worth?

When selling a business, one of the most important steps is pricing it properly. Many factors affect the value of your business, from the current economic climate to your business’s financial performance.

Our company has strategic relationships with respected business appraisal firms – Gulf Coast or Business Valuation Canada, specializing in valuations of privately held companies. Their expertise in valuations and knowledge of the California marketplace enables them to determine the Most Probable Selling Price (MPSP) of your business.

Many lenders accept their appraisals, including Small Business Administration, Bank of America, CIT, and Business Development Bank of Canada.

Business Valuation Methods

1. Opinion of Value. This type of valuation is used for companies with annual sales under $300,000.
2. Value Analysis. This business valuation applies to small-to-medium-sized businesses with annual sales between $300,000 and $1,000,000. The report is about 40 pages long and focuses primarily on historical and current performance.
3. Formal Valuation. This business appraisal is used for companies with revenue between $1,000,000 and $3,000,000. Approximately 70 pages long, the report covers trends, ratios, and common size analysis (income statement analysis).  Along with earnings, the balance sheet will also play an important role in this analysis.
4. Mergers and Acquisitions (M&A) Valuation. This valuation is customized. Business appraisal fees vary depending on the type and purpose of the business appraisal.

Proper evaluation of your business will require a package of documents including financials from the last three years (Income Statements, Balance Sheet, and Tax Returns), as well as current year financial statements. Business valuations are presented in the form of a report. The report takes into consideration the business’s past, current financial statements, and other factors. 

We will advise you on the best method(s) to use to determine the price range for your business, help you gather the documents, and understand the key factors that drive the value of your business.