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Business Appraisal
"But you don't know me;
how can you understand my company?"
We will earn your trust because we appreciate the importance of your company. You've built a company with sweat equity and personal investment of every kind. We understand the nature and significance of your investment, which will be evident in the way the company operates. Site visits, financial assessment, industry research & interviews can be a vital part of what we do but confidentiality and integrity are the first priority at every step in the process.
"Is an Appraisal worth the cost?"
We have witnessed too many people value their own company without expert assistance and end up missing out on the true potential of their company's value. Many factors are easily overlooked by an untrained valuator, e.g. entity goodwill vs personal goodwill, industry trends, transactional data and lack of marketability discounts to name a few.
The area in which every appraisal is similar is the three approaches that are used in the appraisal process:
Income Approach: Based on past performance and projected earning trends of the company, the industry/economy as well as other factors.
Market Approach: Based on what similar companies of comparable size have recently sold for.
Asset Approach: Based on the current assets in the company's possession.
Not all three approaches are equally applicable to every company, however they can still be used as a sanity check for the value we determine. Similar to the varying level of importance each approach has from case to case, the appraisal process itself varies based on the purpose of the business appraisal.
Divorce: In divorce we follow Texas Pattern Jury Charge 203 which requires a fair market value absent a covenant not to compete. This valuation must be defendable in court and thus requires more information and time. A litigation support valuation includes personal and entity goodwill as well as in-depth analysis of a company's accounting.
Buy/Sell: If you are looking to buy or sell a business the appraisal process is less extensive as we mostly need a defendable open-market value for your business as it currently stands. Buy/Sell valuations take less time and are used for brokerage negotiations, buying out a partner, merging businesses or gifting a percentage ownership to family members. More Information on Business Brokerage.
409A Compliance: Employee held businesses must have their business appraised yearly. These valuations are less costly after the first year as they are simply updated with the current year's numbers.
"I feel like I already know what my business is worth."
We agree that you are plugged into your business and have applicable perspective concerning its value. As we work along side you during the business appraisal process, we will strongly draw on your personal knowledge of the company.
Clients often Google the approaches just mentioned. We encourage you to educate yourself on the appraisal process because an informed client is a helpful client.
Hiring us to perform your business appraisal makes sense because we are educated and well-seasoned in the many nuances of appraisal that could be missed by studying articles or websites. Beyond the three main approaches, there are numerous other factors to consider along the way; we have spent the past 30+ years becoming accredited, educated and certified to be experts in this field. Let us help!
If you have any questions or concerns, please call us at
(512) 452-6900
or email