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Business Valuations

An appraisal is a report that clearly states the business value, what factors affect the value and the methods used to derive the value.  

 

Business owners need an appraisal for several reasons:

  • Succession Planning
  • Transitions
  • Tax Matters
  • Court Proceedings
  • Growth Planning

Most clients call Capstone Valuations because of a requirement from outside their business – they have a prospective buyer, the IRS is requiring an appraisal, or perhaps there is a dispute involving the business. We work hard to effectively meet the needs of those clients as efficiently as possible.  Capstone would argue, however, that an appraisal is even more valuable as a planning tool.  What you do today to improve the value of your business will pay high rewards in a future transition.

How does the process work? Capstone Valuations starts with an interview to learn about you and your business.   What are your specific needs?  Once we come to an agreement as to the specific services that will meet your needs, we provide a customized Appraisal Engagement Letter and a Documents Request List.  After receiving the information required, it takes the Capstone team about 3 weeks to provide a draft report.  Once you have reviewed the draft, we provide a final report.

Don’t need a full appraisal report? Call us!  (541) 382-5099. We provide a free, confidential consultation to learn about you, your business and your unique requirements.  We offer a full range of valuation consulting services and can customize a solution to meet your needs.

Business valuation is both an art and a science.

The scientific and analytical aspect employs a variety of approaches or methods applied not only to the subject of the valuation itself, but also to the development of certain inputs into the measurement. The most commonly used valuation methods include the asset, market or income approaches.  While the asset approach may be applied on occasion, the income and market approaches are by far the most commonly utilized in business valuation. The income approach measures value based upon the present value of future cash flows of the business enterprise, while the market approach relies upon the application of market multiples of comparable companies or comparable transactions to the subject company.

The art of a valuation lies in the ability to apply these tools in an effective manner, utilizing professional judgment. This type of insight is gained over years of experience across the spectrum of company life cycles, industries, jurisdictions, and valuation purposes, and also calls for a deep understanding of regulators’ and other stakeholders’ requirements and expectations.

We tailor the scope of our business valuations to our client’s specific needs and the purpose of the engagement. When appropriate, our valuation report provides an overview of the company, industry, economy; discusses value drivers; outlines the analysis performed, along with the inputs and assumptions; and incorporates detailed exhibits that support our valuation conclusion. The valuation analysis is sound and the report is defensible, and if challenged, we provide our clients with additional support, including serving as an expert witness at trial.

When do you NEED a business valuation:

  • Selling or purchasing a business
  • Partnership matters
  • Estate and gift tax
  • Corporate litigation
  • SBA loans
  • Succession planning
  • Divorce
  • Expert Witness Testimony
  • Employee or partner buy-in or out
  • Medical, legal and professional practices

Why should appraisals be done annually, not just when needed?

  • Develops appraisal reports that are substantiated and understandable
  • Set a baseline for future goals related to owners’ value
  • States the current business value, how that value was derived, and what actions drive the value for owners
  • Track progress to make course corrections when needed

Our valuations team of Laura Lemco and Mitch Viner have the depth and breadth of front-line management and operations experience combined with the analysis skills and education to understand when drives your business. With over 20 years of experience Capstone Valuations is your resource for financial analysis and preparation of business valuations.