Business Valuations

by : Patrick O'Connor

Business Valuation / Business Enterprise Appraisals
Business valuations are performed using methodology similar to the process for real estate appraisals. However in business valuation, the data sources are different. Further, there are nuances in the form of analysis.
Reasons for business valuation engagements include the following:

  1. estate tax valuation and planning
  2. business purchase price allocation;
  3. divorce;
  4. loan documentation;
  5. litigation;
  6. research to determine the asking price for a business;
  7. documentation that a purchase price is equitable.

Options for business valuation include :

  1. Multiple of revenue -- the revenue multiplier varies from industry to industry and with the size of the business. The appraiser compiles data for similar types of businesses with similar levels of sales and determines the business valuation based upon industry rules of thumb, features for the subject property and comparable sales