Business Valuation

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Business Valuation

Business/Real Estate/ Equipment Valuation and Appraisal Services

Many business owners know their companies inside and out, however they rarely know how much their business is worth on the open market.  Determining a business’ true value requires a business valuation. While this is one of the reasons for performing a valuation there are multiple reasons why a valuation may be needed such cases include legal matters in cases of litigation or taxation. They can also be required by financers, insurers, and other third parties. Business valuations are not the only type of valuations out there. There is also real estate and equipment valuations as well.

What is a Business Valuation?

A business valuation, or business appraisal, is a separate and unbiased process of determining the value of your business to date. It can also determine the value of business ownership interest and even intangible assets. Knowing an accurate value for your business is vital to operating your business but can also be essential when planning your exit strategy.

Where the valuation report and the appraisal report differ is this:

The valuation report is a restricted-use report that is typically used in determining the selling price of a business. It can also be used in assisting the buy-sell agreement for non-litigation situations.

The valuation report should represent a calculated value that is compliant with the Standards of Institute of Business Appraisers (IBA) as well as the National Association of Certified Valuators and Analysts (NACVA).

The appraisal report provides detailed information into the process of how the value was derived and how that value was determined. The business appraisal report can be used for litigation support and/or third-party review and support, such as the IRS.

What is a Broker Opinion of Value (BOV)?

A broker opinion of value (BOV) is a business broker’s opinion of what a business may sell for, based on their analysis of the business and local markets, expertise, lending, and comparable past sales. A BOV is not a formal valuation, however, a business broker can provide you with the BOV to provide a comprehensive and realistic Most Probable Sales Price (MPSP) range.

The primary reason for a BOV is to provide those selling a business with expectations of what their business may end up selling for, given numerous factors – including the pool of buyers at that period of time. For some sellers, the BOV is used to determine their asking price for the business.

Most BOVs, provided by an experienced business broker, would include insights on how different deal structuring scenarios could ultimately impact the targeted sales price and related tax considerations.

When Should You Hire a Business Valuation Service?

In addition to a few of the reasons mentioned above – such as exit strategy planning, litigation and taxation, the following may also be reasons why you should consider hiring for the service:
  • ● Selling or acquiring a business
  • ● Asset liquidation
  • ● Financing
  • ● Corporate restructuring
  • ● IP valuations
  • ● Shareholder disputes
  • ● Retirement planning
  • ● Life insurance
  • ● Employee Stock Option Plans (ESOPs)
  • ● Prenuptial agreements
  • ● Divorce
  • ● Gift and estate tax
  • ● Partnership agreement

At Midway Business Brokerage. we can assist with your business, real estate and equipment valuation or business appraisal needs, regardless of the reason.

Midway Business Brokerage’s Valuation and Appraisal Services

Whether you are planning your exit strategy, retirement, applying for financing or another reason, you want to ensure that you’re hiring an experienced business broker capable of providing valuation and appraisal services that are in line with industry standards. A valuation report is an essential part of selling a business, and Midway Business Brokerage has a team of professional valuation experts ready to assist.

The professional team at Midway Business Brokerage provides business, real estate and equipment valuation reports, appraisals, and BOVs that are all in compliance with the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation (USPAP) as well as the IBA and NACVA.

Reach out to our team today to discuss your needs with our business brokers.

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