Opinions of Value
A complex component involved in the sale of any business, and naturally one of keen interest to business owners, is the determination of a company’s value. Although several approaches for arriving at a valuation exist (i.e. cash flow, EBITA etc.), the Market Valuation approach is the methodology of choice when operating in the small to medium-sized company arena.
The Market Value approach has as its foundation based on the concept referred to as “Owner’s Benefits”. Essentially, Owner’s Benefits is the sum of all the direct and the indirect benefits that a business owner receives from the operation of his or her business.
Once this amount is determined, a “multiple” based on industry trends and market trends, both past and present, is applied to the Owner’s Benefits calculation to arrive at the market value or probable selling price of the business. A formal report, referred to as an “Opinion of Value”, that details this process, as well as containing a more comprehensive look at market and industry trends, is one of the most requested services that we offer.