Valuation of specialized assets is among the hardest tasks a business appraiser may undertake. Just about all businesses have such assets on hand. Imagine a technology company with specialized lab space and equipment. Or a manufacturing firm with its own set of machinery and factory floor layout. In each case the managers have adapted the… Continue Reading
Do you need valuation for an auto dealership? Here are some industry statistics to consider. New and used car dealerships are a significant part of the automotive retail and services industry. Classified under the SIC code 5511 and NAICS 441110, there are some 43,600 such establishments in the US alone. The industry sector generates a… Continue Reading
If you are valuing a private company, one of the key elements of the appraisal is assessment of the business risk. You can quantify your risk assessment as the discount or capitalization rates. To calculate these rates use any number of the cost of capital models such as the build-up or CAPM. Regardless of the… Continue Reading
If you are thinking of valuing an environmental consulting company, here are some key industry statistics to ponder. The industry sector, classified under the SIC code 8748-9905 and NAICS code 541620, consists of over 10,220 firms; mostly in private ownership. The industry sector as a whole generates about $13.4B in annual revenues. The average environmental… Continue Reading
Are you preparing a business appraisal for yourself or a client? Then following established business valuation standards could lend considerable credibility to your work product. Over the years the business appraisal profession has come up with a number of standards seeking to define everything from the methodologies to the scope and format of business valuation… Continue Reading
Residential and commercial real estate appraisal firms comprise a large segment of the real estate services industry. Classified under the SIC code 6531 – 9901 and NAICS 531320, there are some 14,000 such companies operating in the industry in the US alone. Together these professional services firms generate just over $5.8B in annual revenues employing… Continue Reading
If you need to determine the value of goodwill of a business or professional practice, the capitalized excess earnings method is an excellent tool. This asset-based valuation method, known as the Treasury method, is especially well suited for goodwill estimation for all types of privately owned companies. Treasury Method Uses Two Rates of Return One… Continue Reading
If you are valuing a private business for any reason, the market approach should be an essential part of your analysis. There are a couple of methods you can use to establish the value of a privately owned firm: Comparative transaction method Guideline public company method To use the comparative transaction method you basically develop… Continue Reading
Have you considered using the Discounted Cash Flow method in your business valuation? If so, you need to focus on creating reliable business earnings forecasts and assessing its risk. Earnings growth rate effect on terminal value An often overlooked part of the discounted cash flow method analysis is estimation of the long-term business earnings growth… Continue Reading
If you need to get a top notch business appraisal, consider using a number of different business valuation methods. This multi-method approach to business valuation is standard in professionally prepared appraisals. The reason is that each method sheds a different light on business value. Hence, seeing the results from a number of methods gives you… Continue Reading
A common reason business people need to have their business appraised is gift and estate tax situations. Business ownership grants by living owners to family members trigger a gift tax liability. If an owner passes away, the business is inherited by other partners or family members. One rather unsavory chore they need to handle quickly… Continue Reading
If you are valuing a privately owned business, the income-based valuation methods are probably high on your list of tools. To use these methods, such as the Discounted Cash Flow technique, you need to determine the discount and capitalization rates. Income based business valuation methods and company size If you take a look at the… Continue Reading
One of the key elements in business valuation of any size is risk assessment. Whether you use the direct capitalization methods, such as the Multiple of Discretionary Earnings technique, or the Discounted Cash Flow method, you need to calculate the capitalization and discount rates to capture that risk. Business valuation and risk measurement The Build-Up… Continue Reading
How to value a home remodeling contractor business? First, some important industry stats to consider: The home remodeling companies are usually classified within the specialty contractor industry sector under the SIC code 1799 and NAICS 236220. These businesses generate combined annual revenues of $41.96B. There are some 105,000 such firms in the US alone employing… Continue Reading
Quite a few privately owned businesses and professional practices have more than one co-owner partner. And unplanned departure of a partner can have a major effect on the success of a business going forward. To safeguard business continuity, you as business owners need to plan ahead about how to transfer business ownership interests with minimal… Continue Reading