Valuation of Ongoing Business Concern
Business valuation is a process and a set of procedures used to estimate the economic value of an owner’s interest in a business. Valuation is used by financial market participants to determine the price they are willing to pay or receive to perfect a sale of a business. In addition to estimating the selling price of a business, the same valuation tools are often used by business appraisers to resolve disputes related to estate and gift taxation, divorce litigation, allocate business purchase price among business assets, establish a formula for estimating the value of partners' ownership interest for buy-sell agreements, and many other business and legal purposes.The
owner of a business is the only person who can determine if and when it is time to sell his/her business. As one decides whether he/she wants to sale
their decision, must include the following issues:
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Is your business an “Ongoing Business
Concern” which your family can manage after you are gone?
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Has your business provided for you and your
family?
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Does your business
have the financial resources to keep up with new technology?
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Do you just want a
change in your lifestyle?
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Will the sell of your
business fund your retirement?
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Every 7 years many
industries go through a metamorphosis.
Is your industry approaching such changes?
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What is you exit plan? -
Is your partnership not
working?
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Are you just are not
happy with where you business is at this point?
-
Have you built a very
successful business and you are ready to sell (cash-out)?
The economic value of each business is
determined by the following issues:
-
Business Concept;
-
Lease expiration
date;
-
MBE, DBE, or WBE
status;
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Minimum Monthly
Rent;
-
Net Cash Flow;
-
Percentage Rent;
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The life cycle of
your industry;
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The life cycle of
your business;
-
The type of industry
(retail, service, food, manufacturing, health, brokerage and others);
and
-
Union Relationship.
Business valuation methods
Normalization of Income (recasting)
Request a Business Valuation
A review of our
sample engagement agreement will
provide details about the scope of services offered.
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