With Haloween out of the way, it got me thinking about scary business events. As someone who sells and values businesses, one of those scary business events is when a potential client says “My accountant said my business is worth $***** [insert grossly inflated figure]” My approach is to ask for a copy of the Read more about But my accountant said my business is worth $…[…]
When conducting a business valuation or as a corporate adviser preparing a business profile to sell a business, we will review the financial statements to seek to identify any abnormal items which may warrant adjustment. The purpose of these adjustments are to eliminate one off, abnormal, personal or non-commercial transactions to provide a view of Read more about Don’t be abnormal with your business valuation normalisation adjustments[…]
Some business owners and their advisers use the terms Business Valuation and Business Appraisal as if they are the same. Are they the same or are they different? Both Business Valuations and Business Appraisals are opinions of value of a business. However, their purpose, process and cost are very different. Purpose A business Read more about Business Valuations and Business Appraisals – are they the same?[…]
When you instruct a professional to undertake a business valuation, ensure you have given sufficient thought to your instructions or else the valuation provided may not meet your needs. Here are some tips for better business valuation instructions. Better Business Valuation Instructions What do you want valued? Do you require a business valuation instructions, a Read more about Better Business Valuation Instructions[…]
There is a natural tension between accountants and business broker/s when it comes to small business valuations. The accountants correctly argue that they have strong technical skills whereas the business brokers say (also correctly) that they are across what is actually happening in small business sales – so which is better? I am encouraged that Read more about Accountants or business broker – who prepares the better small business valuations?[…]
It may be surprising that there are no formal restrictions to practice business valuation in Australia, unlike tax agents, auditors and business agents. What qualifications? Fortunately both Chartered Accountants and Australian Institute of Business Brokers have identified the need for a business valuation specialisation and each have developed separate accreditations. Chartered Accountants have recently introduced Read more about How to select a Business Valuation expert[…]
Most credible business valuations of smaller and medium sized businesses will include some commentary on sales of others businesses as part of the overall valuation process. But how relevant are these other business sales? Many valuers will call these other transactions comparable sales. I have some difficulty with the phrase comparable sales, as unless I Read more about When valuing a SME business, how important are sales of other businesses to the valuation?[…]
When we accept an engagement to value an asset, we are very careful to clarify exactly what the client or solicitor wishes us to value. We have seen instructions which ask us to value one asset, but actually after enquiring, want something different valued. The key assets to be valued are: The Business Value The Read more about What Do You Want Me to Value?[…]
I was at a Chartered Accountant Business Valuation Specialisation group meeting the other week and we were talking about earn outs and the presenter used a useful phrase that “earn ours are the price of owner dependency”. What are earn outs As business valuers and practice brokers, we often see earn outs in services businesses, Read more about Earn Outs are the Price of Owner Dependency[…]
Whilst there are a number of different ways of valuing a business such as capitalisation of earnings and discounted cashflow, there are four key drivers of business value: Earnings – ultimately every business owner is looking to generate earnings from the holding and eventual disposal of any business Growth – the higher the realistic growth Read more about The Four Key Drivers of the Value of your Business[…]