by Harvest Business Advisors | Aug 20, 2018 | Business Valuation
Most business valuation analysts belong to associations (such as the AICPA for CPA’s, the NACVA for CVA’s, USPAP for ASA’s) that require certain standards be followed in preparing a business valuation. These business valuation standards tend to be quite rigid for a Conclusion or Opinion of value and more flexible for a Calculation of value. Valuators doing work to these standards (which are required by any group the valuator belongs to and can be voluntarily agreed to by anyone who understands the standards) always represent only their findings (the Opinion found or the Calculation estimated). This means they do not represent you or any other party even though you pay them and you may retain them.
Third party obligations when performing a business valuation require the valuation analyst to be impartial. An example is the bank’s interest in having a fair and impartial business valuation if the analyst is preparing a valuation for a prospective loan and those obligations override allegiance to you.
If the valuator has a conflict of interest that must be stated in the report and it will cause the opinion to not be fully compliant.
Finally, if your purpose is for litigation or potential litigation such as divorce or partnership disputes all experts (including valuation experts) must be impartial or they can be disqualified by the court. Court expert witnesses represent the court to allow the court to better understand a matter. Having said this, in many matters experts hired by the opposing sides may find very different values. Usually this is because facts are not agreed to, risks are assessed differently because underlying assumptions are seen differently by the parties, therefore the found value or result can be quite different.
- Clients choose Harvest Business Advisors for our accurate business valuations and our consistent ability to deliver the highest price in the smoothest sale transaction possible. Harvest provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com or 443.334.8000 to discuss selling your business, ordering a business valuation or buying a business.
Clients choose Harvest Business Advisors for our accurate business valuations and our consistent ability to deliver the highest price in the smoothest sale transaction possible. Harvest provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com or 443.334.8000 to discuss selling your business, ordering a business valuation or buying a business.
by Harvest Business Advisors | Jan 5, 2018 | Blog, Business Valuation, Exit Succession and Planning
Your clients are starting to think about business succession and even possible business exit. (Or perhaps, they should be.) But, how do you, as an accountant, CPA, financial planner or attorney provide assistance most effectively to produce higher valuations and when important, smooth family and management transitions?
7 tips are provided below.
- “You Should Not Sell….” is a frequent first response of accountants and CPA’s when a client indicates they are thinking of selling. A better response is to ask why they are thinking about selling and then really listening. Then help them develop a plan to meet their goals.
- Business valuation for a sale is not like valuations for other purposes. It is much more about potential sales price and recent profitability.
- Potential is nice, it motivates buyers, but 95% of the time it does NOT increase price. If your client’s business has untapped potential they want to be paid for – help them obtain the potential now.
- Negotiating a sale is not like presenting testimony. Recognize and work with emotions. This is much more effective way to move prices upward than a fully rational discussion of cap rates.
- Help your client understand who their best buyer will be and what buyers want. This is profits, people, and systems. Help them develop them.
- If the buyer is a child or manager have them start conversations early. Family transactions often take five years to negotiate and five years to finance. These can be hard conversations but encourage your client to start today.
- If a market sale is in order help them hire a broker. The broker will create an auction environment and negotiate with multiple prospects while your client continues improving the business and profits right through closing.
Help your clients start early. It is never too early to start and be ready for both planned and unplanned exits.
Harvest Can Help – we provide you and your clients fast and accurate business valuations, definitions of “best buyers” and of course Outstanding Business Brokerage services.
Click to View our webinar (20 minutes) given for the National Association of Certified Valuation Analysts and download 30+ slides.
Clients choose Harvest Business Advisors for our accurate business valuations and our consistent ability to deliver the highest price in the smoothest sale transaction possible. Harvest provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com or 443.334.8000 to discuss selling your business, ordering a business valuation or buying a business.
by Harvest Business Advisors | Apr 20, 2015 | Business Broker 'Bites', What's New
Ed Davis, CPA, CVA, Business Broker and Business Valuation Expert in the Mid-Atlantic
Ed Davis, CPA, CVA business broker and business valuation expert, will be participating in a panel discussion at the Atlantic Region Energy Expo in May 12-14 at the Taj Mahal in Atlantic City, New Jersey. The Atlantic Region Energy Expo is an annual trade show for companies that deliver fuel oil, propane and alternative fuels (bio) to a variety of residential and commercial customers. The topic, that all owners of privately owned companies think about, “Navigating A Successful Transaction”, will be hosted by Steve Abbate, Managing Member, Cetane Associates, LLC. Click here for more information.
Connect with Harvest Business Advisors today – email info@harvestbusinessadvisors.com or call 443.334.8000
