This is the key Point: If someone is presenting or proposing a valuation without taking these factors into consideration the valuation number is likely to be misleading and almost certainly not accurate for a small business.
Return on Investment
How has R&D been accounted for?
Shareholder Agreement (if one exists)
Value of Employees (cost of recruitment and training as a group)
Client Base and Cost to Rebuild
Value of Supply Chain
Value of Distribution Network if one exists
Internet Presence and Use (social network)
Dominance if any in the Marketplace
Knowledge Base of Owner and Employees
Procedures Documentation (How well are all aspects of
the company documented?)
and Geopolitical Considerations
Leverage - Cost of
money. Is leverage applicable and if so at what
Minority Interest (if
Purchaser (Partners are also special interest purchasers
as they have more knowledge, interest, and opportunity,
with less risk than regular buyers.)
How well is the
business/practice expected to function with changes in
management? (if applicable)
Return on investment
is always my first and last consideration.
Eric Jordan, President
Call or email now!
Profiles of some 2016 clients: Most are in Edmonton, Calgary, Vancouver, Ottawa and Toronto
Multi Million Dollar Distribution Business- Valuation for purpose of sale.
Plumbing and Gas Business- Valuation for purpose of divorce proceedings.
Multi Million Dollar Eco Tour Business- Valuation for purpose of expansion loan.
Law Practice- Valuation for purpose of sale.
Lawn and Yard Maintenance business- Valuation for purpose of divorce proceedings.
Art Studio Franchise- Valuation for accounting purposes and CRA requirements.
Plumbing Business- Valuation for purpose of divorce proceedings.
Irrigation and Snow Removal Business- Valuation for purpose of divorce proceedings.
Large Retail Bakery- Valuation for purpose of sale to employee over 5 years.
Software Distribution rights in Canada- For Australian Parent Company (Agency Dispute.)
Janitorial Supply Business- Valuation for purpose of partnership dispute.
Tree Pruning and Lawn Business- Valuation for purpose of sale.
Battery Distribution Business- Valuation for purpose of sale.
Software Testing and Quality Assurance Company- Valuation for purpose of partnership dispute.
Blind Manufacturing and Installation Company- Valuation for purpose of legal action in partnership dispute. This went to court on May 27, 2016 and resulted in our client receiving over 80% of the amount he sued for. Client is available as a reference.
Classic Car Renovation Business- Valuation for multi-million dollar lawsuit in Florida launched by Canadian partners.
Dance Studio- Valuation for purpose of establishing value for pending sale.
Cross fit GYM- Valuation for purpose of establishing a viable price for buyer to offer.
Jim’s Burger Location in US- Valuation for purpose of divorce proceeding.
Two Wholesale Bakeries- purpose of the valuation was to find values so the companies could merge.
Sign Manufacturing Business- Valuation for purpose of a minority shareholder leaving company.
Landscaping and Excavating Company- Valuation for purpose of divorce.
Day Care Facility- Valuation to support litigation and negotiation for damages inflicted by City in zoning error.
Accommodation Business- Valuation for purpose of sale.
Smoker Operation (8 pigs at a time in size)- Valuation for tax purposes.
Flooring Business- Valuation for purpose of sale.
Retail Wine Business (Franchise concept)- Valuation for purpose of sale.
Prop Business- Valuation for purpose of partnership buyout.
Computer Retail- Valuation for purpose of potential purchase.
Music Composer Business (original soundtracks for documentary movies and videos)- Valuation for purpose of divorce proceedings.
Two Pharmacy Locations- Valuation for purpose of sale consideration.
Luxury Bed and Breakfast combined with Events Business- Valuation for the purpose of sale.
Pool Building Company- Valuation for purpose of sale to family.
Automotive Related Business- Valuation for purpose of sale.
Specialized Manufacturing Firm within Printing Industry- Valuation necessary as someone expressed interest in purchase.
Daycare- Valuation for purpose of possible sale.
(Interested Purchaser came forward.)
Focused Builder- Valuation for purpose of establishing value for employee buy in.
Software Maintenance Contractors- Valuation for purpose of possible merger, (many millions of dollars.)
Chiropractic Practice - Valuation for purpose of buy in.
Wholesale Food Business- Valuation for purpose of settling partnership dispute.
Accounting Firm- Valuation for purpose of divorce.
Call Centre- Valuation for internal purposes.
Hair Salon- Valuation for purpose of employee buy in.
Convenience Store and Gas- Valuation for purpose of lease dispute.
Specialized Builder of Restaurants- Valuation for purpose of employee buy in.
Wholesale Food Manufacturing and Distribution- Valuation for purpose of partnership buyout.
Retail Sporting Goods Franchise- Valuation for purpose of purchase.
Diesel Repair Shop- Valuation for purpose of partnership dispute.
Cellular Repair Company- Valuation for purpose of internal planning.
Roofing Company- Valuation for purpose of partnership consideration.
Upscale Personal Services Company- Valuation for purpose of internal planning.
Specialized Wheel Business- Valuation
for purpose of sale.
FOR A LIMITED TIME We
are offering up to $3,500 in additional services to each of our
valuation clients at no additional cost!
objective is to sell your business we can offer you free
advertising on www.pin.ca which is one of Canada's oldest,
independent business-for-sale-by-owner websites (established
We can also
give your business local, regional, national and international
advertising exposure on our data base system, optimised for
maximum search engine results.
If you can't
use these services yourself you can pass the offer
along to family or friends. (Certain restrictions may apply.)
How Financials Can Be Deceiving: (This is the kind of practical solution offered by our system.)
Accounting for tax purposes is totally different than interpreting financial statements for Business Valuation Purposes. Let us give you just one example: (Think Partnership or Divorce)
For tax purposes R&D is an expense in the year the R&D occurred.
For the purpose of an accurate valuation the R&D should be amortized over a period of 5 to 12 years. HUGE DIFFERENCE.
The financials must be normalized to reflect proper treatment of R&D. If we didn’t do this a company could spend 95% (or all) of the profit on R&D and might successfully claim the company to be worth very little for a short period of time. Perhaps not fraud but certainly manipulation, depending upon the purpose. (Divorce or other partnership)
OUR UNIQUE BUSINESS OPPORTUNITY:
Do you have a business friend who
might like to learn Valuation? 5-25 years business experience a
must. Small investment required.
We have a business opportunity available for someone with at least 5 years successful business experience who would purchase our training and operate under license as an independent Business Valuator. Being fluent in a second language
may also be an asset. Call for details. 1 800 606 0310 or email
email@example.com. Click the
triangle below for an audio message and more information.