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ALWAYS KNOW THE VALUE OF YOUR BUSINESS


Valuing a business is both an art and a science. It is a complex and painstaking process. Many factors have to be considered in valuing a business, such as future earnings potential, asset analysis, and environmental influences related to economic and industry conditions. To reflect the years of hard work in accumulating a business’s tangible and intangible assets, a business owner must use much more than tax returns and financial statements as the basis for the financial presentation of their business.  While using tax returns and financial statements may be good for tax purposes, they do not fully indicate the business goodwill or intangible value. Therefore, the value of a business and the price must be justified to potential buyers and subsequently to commercial lenders.  An independent and objective evaluation ensures the price presented to buyers is believable, reasonable and well positioned against comparable businesses available in the market.

 

Sale Acquisitions and Mergers
A valuation not only assists business owners to determine the value of their business, it also helps them optimize value when considering a sale, merger, acquisition, joint venture or strategic partnership. While a professional valuation may not match exactly a sellers view of the value of their business, nevertheless it does add considerable credibility to the owner and his business. It is especially valuable during the funding phase with commercial lending institutions and potential buyers to justify price.  During the due diligence phase, when a business enters negotiations with another company, lack of organized documentation of the company's historical financial information and future prospects may result in a business owner conceding more to the acquiring company than originally intended or justified. The valuation process assists a company in organizing and evaluating these materials.

 

Legal Reasons
Many legal matters also require a business valuation. Disputes of a marital or business partner nature, establishment and management of ESOPs, eminent domain issues, election of different corporation status, and minority shareholder actions all require a detailed valuation be performed by recognized valuation professionals. In certain instances, the valuation must be based on specific standards of value established by law.

 

Taxable Events
Taxable events, such as estate and gift planning, also require a detailed business valuation. Unforeseen events can happen at any time, and it is important for a business to be prepared in case the detailed knowledge of an owner or key employee is suddenly no longer available.

 

Financing
A valuation is an essential tool for businesses seeking additional capital, through a private placement or an IPO, or if the company is considering a reorganization or change in strategy. A well-structured and presented business valuation provides a business with greater credibility when approaching new or current investors in an attempt to raise capital. BBNY business valuations are prepared by specialized, independent and objective third parties that have been involved in thousands of transactions on behalf of business owners, business intermediaries, private investment banks and other professional advisers as well as some of the largest SBA lenders nationwide. They provide an objective and expert opinion about the value of a business that complies with SBA guidelines and is recognized by virtually all commercial lenders. BBNY works in conjunction with McKinnon, Wootton Valuation Services to manage the process to provide the following independent and objective business valuations. These services include:

 

  • Limited Scope Business Valuations
  • Comprehensive Business Valuations
  • Letter Form Opinions
  • Fairness Opinions
  • Litigation Support

 

In addition BBNY provides business appraisals as well as due diligence services for purchasers of closely held businesses performs valuations to satisfy requirements arising from a variety of situations including the following areas:

 

  • Sale or Purchase of a Business
  • Obtaining Financing
  • Buy Sell Agreements
  • Divorce / Litigation
  • Gift Tax / Estate Tax Planning
  • Fairness Opinions for Fiduciaries
  • Litigation
  • Dissenters' Rights
  • Mergers and Joint Ventures
  • Employee Stock Ownership Plans
Our valuation partners have supervised the due diligence process on Leveraged Buy Out transactions for transactions in excess of two hundred fifty million dollars. These included companies in manufacturing, distribution, retail, media, health care, energy, technology, education and agriculture. Call us at 585.624.7998 Email for a Free Review and get a valuation which conforms to the highest standards in the industry.
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