What is your business worth?

What could it be worth?

Growing a business requires an understanding of its current and potential market value…and the strategic plan and tactical steps to reach that potential.

Selling a business the most effectively requires a solid understanding of the realist fair market value of the business at the present time.

Utilizing sophisticated proprietary algorithms, extensive comparative databases, and a variety of proven modalities, we analyze business finances, market presence, resources, infrastructure, policies & procedures, personnel, products & services, assets, history, projections, and other factors to determine a realistic prediction of the business’s credible range of value to potential buyers, in a competitive market.

Various methods are used to determine an Estimated Opinion of Business Market Value. One metric is established by taking a weighted average of the last three years of the company’s pre-tax profit (greatest weight on the most recent

year, lesser weight on the previous two years) and then applying a multiple based the company’s industrial class and comparable sales in the past. The pre-tax profit used is usually the “Seller’s Discretionary Earnings” (SDE) for one owner-operator. There are several other factors that come into play as well, including such things as gross revenue, increasing, or decreasing sales or profits, year-to-year performance anomalies, market share, employee strengths and weaknesses, concentration or diversity of customers and/or suppliers, most likely type of buyer, lease and facility concerns, etc.

Therefore, we use profit and loss statements, balance sheets, and tax returns from the past 3-4 years, along with detailed answers to additional questions, SDE calculations, and comparable-sales databases.

For most businesses, the value of the physical/tangible assets in not of significant importance. “The assets are worth the profits they generate”. Most of our valuations and the market itself are not based on the asset valuation method. However, in asset-rich companies, particularly those with intrinsic real estate (e.g., motel), an asset-based component to the over-all valuation can be relevant.

In some cases, a strategic acquirer (one already in the same business field) will pay a premium for a business because of its strategic value to them; when appropriate we take that into consideration as well.

The goal with our EvergreenGold Estimated Opinion of Business Market Value is to establish a reasonable estimate of the value of the business for purposes of marketing, strategic planning, amicable allocation of equitable interest, etc. It is not intended for the purposes of lending, litigation, expert witness testimony, or tax resolution proceedings where a more formal valuation conducted by a professional valuation specialist is required.

Documents we will need for valuation purposes (to the extent they are available) include;

*Past 3 years business tax returns, or

*Past 3 years Profit & Loss statements (P&L).

*Preferably both the tax returns and P&Ls.

*Profit & Loss (P&L) statement and balance sheet for the current year.