Expert Business Valuation Services
To support the successful transfer of ownership
and guide critical business decisions
The personal wealth of over two-thirds (70%) of business owners is tied up in their business. For many of these individuals, the business becomes their personal retirement savings vehicle. These individuals, however, could be driving blind. Without knowing the value of the business, how will they know when they can stop working or the lifestyle to expect in retirement? Having the information needed to prepare adequately for retirement is just one of the many benefits to a business valuation.
We perform business valuation services to support the successful transition of ownership in middle market businesses, as well as to provide business owners the timely information they need to make informed decisions.
In addition to exit and transition planning, privately held business owners, as well as the legal community and financial world rely on our team of experts in valuation matters for assistance in the following areas:
- Business Growth Planning
- Estate and Gift Tax Planning or Filings
- Buy/Sell Agreements
- Employee Benefit Plans (ESOPs, Stock Option Plans, etc.)
- Lending or Investment Decisions
- Insurance Planning
CALCULATIONS OF VALUE
Formal business valuations, while required under certain circumstances, typically involve a fairly extensive, expensive and time-consuming process. However, thanks to innovative technology those barriers can be avoided in many situations.
Using our proven and streamlined approach our valuation experts can provide accurate “Calculations of Value” at a much more reasonable cost and quicker turnaround. In fact, our valuation experts have gone one step further and developed a “Strategic Business Valuation”, which is detailed below.
STRATEGIC BUSINESS VALUATION
Our valuation experts have developed a comprehensive and strategic growth-focused business valuation process intended to calculate business value and maximize it. Our process includes the following:
Baseline Business Valuation – Our valuation experts will provide a Calculation of Business Value using a preferred Income Approach, the Single Period Capitalization Method (SPCM), as well as, where applicable, the Transaction Method, a Market Approach. Our calculation engagement results in a range of values for business growth or transaction purposes, based on the following:
- Financial Analysis – Five (5) years of historical financial condition and operating analysis, as well as current year’s financial analysis, as necessary.
- Key Performance Indicator (KPI) Analysis – Ratio analysis which includes industry comparisons commonly used by Private Equity Groups (PEGs) to identify meaningful trends and/or “red flags” which may require corrective action.
- Normalization Adjustments – Identification and adjust for any non-recurring, extraordinary or non-operating income and expenses, as well as for reasonable officer/executive replacement compensation and fair market value of facility rent.
- Transaction Database Searches – Industry, and company size, specific searches of transaction databases, analysis and filtering of results and application of resulting valuation multiples to the subject company.
- Non-Operating Assets & Liabilities – Identification and quantification of non-operating assets and liabilities along with any necessary adjustments.
Business Value Driver Assessment – Using customized software developed at MIT, we will evaluate 18 internal and external drivers of your company’s value with a strategic focus on how you can grow the company, reduce company-specific risk, and maximize business value. The assessment and resulting Discover report can be followed up with a Deep Dive “mini-retreat” analysis to develop an actionable and detailed strategic plan for your business success.
Ownership Dependency Assessment – Owner dependency is key factor in the ultimate transfer of a business. Through a short survey, we will perform an assessment that lets you know how dependent the business is on your individual efforts in the following 8 categories: owner involvement, internal operations, strategy and planning, governance and ownership, financial matters, performance management, sales and business development, and company culture.