The Valuation Process
What You Can Expect
Business owners who decide to sell their business without first getting an independent business valuation are asking for trouble. Research has shown that business owners who execute an independent business appraisal before selling their business get a 20% higher purchase price than those business owners who do not get a business appraisal before selling. The valuation is a line in the sand between buyer and seller! It is a litmus test to identify fair market value, as a result minimizing room for negotiations and price reduction. For a $3 million transaction, why would you forsake potentially $600,000?!!?
Below is an overview of how we interact and participate with business owners:
Its as simple as ABC.
Step 1: THE FIND - You find, research and contact FairMarketValuations.com.
Step 2: INITIAL DISCUSSION AND FACT FINDING - Communications are exchanged between you and a senior staff member from FairMarketValuations.com. An initial phone interview is conducted to discover your needs, requirements and objectives. We also present to you a brief gotomeeting presentation so that you fully understand our product and service offering. We even show you pictures of our staff (We’re real people), and sample reports and analysis.
Step 3: ENGAGE FMV AND EXPERT ASSIGNMENT - When you choose to engage Fair Market Valuations you are assigned to the most qualified and appropriate credentialed valuation expert that “owns” his/her relationship with you.
Step 4: INITIAL INTERVIEW - You will be contacted to set the time and date for the ”Initial Interview”. Prior to and during this interview detailed key information is obtained such as Company History, SWOT information, Management Information, and, importantly key financial data including balance sheet information and profit and loss data for appropriate periods – among many other items discussed.
Step 5: ONGOING INVESTIGATION - Once started, you and your professional consultant will work together on any additional investigations, but typically most information can be obtained in the “Initial Interview”. This takes approximately two hours to four hours to complete.
Step 6: CREATION - Your credentialed valuation expert will conduct the official valuation, and create a detailed and professional report and presentation.
Step 7: QUALITY ASSURANCE – Fair Market Valuations ensures every business valuation is reviewed by a second party – either one of our on staff NACVA accredited CVAs or AVAs (with the highest credentials in the industry) will perform this quality check step.
Step 8: PRESENT – Your valuation expert from Fair Market Valuations will present their findings to you in a formal presentation. The creation of most valuations typically takes ten business days to complete.
Step 9: SHIP - The completed business valuation report is shipped to the Consultant for review and disclosure
THERE YOU HAVE IT! You are now armed with the information you need to make proper decisions regarding your business and potentially optimize an exit.
You will then collectively determine the most appropriate actions to take following the business valuation process:
- Grow the business strategically
- Sell the business
- Buy a business
- Maintain status quo
- Other strategic decisions