VR Business Brokers, Mergers & Acquisitions of Tampa/Apollo Beach Business Valuation.
Valuing a business accurately is one of the most important considerations to keep in mind when selling.
We can help you get an accurate valuation of what your business is worth in today’s market. Our industry-leading team of business buying and selling experts have behind-the-scenes access to all of the latest and best valuation methods and tools available, plus they have their finger on the current pulse of the market. Most importantly, they know how to analyze and interpret all of the available metrics and data to provide you a fast, accurate, reliable, and 100% confidential business valuation.
For tax purposes, privately-owned businesses sometimes strive to show as little income as possible on their financial statements and tax returns.
At VR Business Brokers, we are experienced in reconstructing financial statements to provide a more realistic view of your business. As an additional benefit, our business brokers can draw upon their experiences with other businesses and act as consultants to point out what others in the industry have done to improve their profitability and likelihood to sell.
There are many methods of pricing a business. The most commonly used are:
- Cash Flow Method: A multiple of the annual cash flow (which we refer to as Discretionary Earnings or “DE” or Earnings Before Interest and Taxes or “EBITDA”). This multiple can vary widely depending on the business, the economy and the industry trend.
- Asset Method: A combination of “Furniture, Fixtures and Equipment” (FF&E), the inventory and a multiple of Discretionary Earnings (DE).
- Gross Sales Method: Three to 12 months gross sales; again depending on the business, the economy and the industry trend.
- Comparable Sales/Market Method: This method compares sales of similar businesses and also the valuation multiples from these acquisitions. An adequate number of comparable companies is necessary to produce credible results. Price is usually related to cash flow and varies with the financing terms agreed upon. Price will also depend on the type of business, the value of the assets, general attractiveness of the business and future potential, among other factors. True market value is what a buyer agrees to pay and seller agrees to accept (without undue pressure).
The value of your business is based on a number of different factors and can be calculated in several different ways. The size of the business, the type of industry it’s involved with and recent market trends will have an effect on the value of the business. At VR we ensure the right method for the most accurate valuation. We also prepare a market value report for your business and review it with you so you get a better understanding of the true value of what your business is worth.