Business Valuation Services

Our Background: We has sizeable experience in business valuation – with over 250 companies valued by our team members – and we have gone ahead to invest in some of them ourselves, or arranged investors – based on mutual agreement with clients. We have determined the fair market value of businesses from different industries – services, manufacturing, technology – both brick & mortar companies, and online businesses.

The definition of fair market value is the price at which the asset would change hands between a willing buyer and a willing seller, neither being under a compulsion to buy or to sell and both having reasonable knowledge of all relevant facts. We have some of the best professionals in finance and capital markets, who have worked with reputed companies like McKinsey & Co, JP Morgan, and Citigroup. So when we arrive at a fair market value, you can take that to anyone with 100% confidence.

We have created Business Valuation Reports for both public listed companies and private companies.

Valuation Methods: As you probably know already, there are multiple ways to value a business. Valuations based on multiples of future earnings and the capitalization of future cash flows are the most common. We use the following valuation methods in our work and use a combination of them to arrive at the Fair Market Value for the business.

Multiples Method: Businesses with a record of sustainable profits can be valued at a multiple of earnings. Profits are adjusted for any unusual, one-off items to arrive at an estimate of “normalized” earnings. We would value smaller businesses at a lower multiple than similar but larger companies.

DCF Method: Mature, cash-generating businesses can be valued in a similar way but based on cash flow. Future cash flows are estimated and discounted – known as discounted cash flow because long-term cashflow is worth less than cash flow today.

Asset Value Method: An asset valuation can be useful for stable a business with significant tangible assets, for example real estate, infrastructure, manufacturing, etc. With this method, the starting point is the value of assets stated in the accounts (“book value”). These numbers are then refined to reflect market conditions and factors impacting the value of assets.

Entry Cost Method: For new or young businesses, the cost of creating a business similar to yours can be used as a basis for valuation. Costs could include buying equipment, employing staff, product development, marketing costs, attracting customers, etc. The time spent in building a customer base can be a big entry cost even if all other things are possible at low cost. For a business to be attractive for buying, the entry cost should be higher than the price expected by the seller.

Our Approach:
Whether you are a buyer or a seller, we will provide you with a report that you can defend at any level. To prepare a business valuation report/ business value appraisal, we do the following steps:

• Brief interviews with executives (and feedback from key clients in those cases where a single client contributes to over 20% of company revenues ) – these will be done with using questionnaires, so even email interaction is fine.
• Review and analyze financial information/reports
• Review and analyze market conditions in which the company operates
• Understand the “real value drivers” or “KPIs”of the business (in our experience, most businesses have less than 5 real KPIs)
• Review comparative data from similar companies
• Take 3 different approaches to value the business and use weighted average formula to establish a “price band” for the business – both from buyer and seller perspective.
• Acid Test: If we had to write a cheque to buy this business, would we pay this amount?

Deliverables:
You will receive the following document:
Business Valuation Report (a pdf file of 4-10 pages) certified by our Director.

Fee:
Depending on the complexity of the business and the factors noted in the above paragraph, our fee typically ranges from $1K to $5K – which is good value for money compared to large accounting/consulting firms because our overhead is minimal. However, practical applicability of our valuation report is better according to observers. You can browse this website to learn about our depth of business understanding, business appraisals, business valuations.

Next Steps:
Please contact us to share your business valuation requirement. Thanks.