Business Valuations Pennsylvania
Assigning an accurate and comprehensive value to your business is essential if you plan to sell the business or look for equity investments. In addition, an accurate valuation can be helpful when seeking financing to grow your business and expand into new market opportunities.
Regardless of your motivation for seeking a business valuation, the team at A Neumann & Associates has the expertise you need. Once we have concluded our initial meeting and have collected all of the necessary marketing and operational information (as well as tax returns and other financial statements), we will be able to begin the in-depth process of a recasting for your review while you continue to focus on your daily operations. When working with A Neumann & Associates, you can count on our discretion and confidentiality as we go through this process. We understand that any leaked information can lead to significant impacts (often negative) on the selling of your business.
Read more below about how we can help you reach a business valuation, and contact us as soon as possible to get started on this important business process today. If, after your valuation is complete, you would like advice as you prepare to sell your company, we will be able to assist you in this process and help you reach and interface with pre-qualified buyers.
Central Factors of a Comprehensive Business Valuation
The following are just a few of the many factors to reach a final dollar amount through a certified valuation process. While each of these factors is very familiar to a business owner, the method with which to translate these factors into tangible business valuation figures is complex. Working with an experienced, accredited professional is important to ensure that you are assigning the correct value to the business you have worked so hard to build.
Growth Projections
A business’ current profit and loss statements are central to determining value, but they only tell a limited part of a bigger story. When a business is positioned for aggressive market expansion in an unsaturated industry, profits and losses may only tell a story of investments and capital allocation as the owners and management work to establish a baseline for growth. Selling a company based solely on current financials is a dangerous decision to make in a growth industry, and we will ensure that this part of the equation is included in your valuation.
Market Position
Market position has a lot to do with growth projections but is a unique factor when determining the valuation. Market saturation, your target audiences’ interest and desire for your product or service, and other market indicators will help us understand your market position and communicate the perceived future value of this position as you prepare to sell your business. As with many other variables, the market position does not factor into tax forms or pure financial documents, so it is important to work with an experienced professional who can help you include these important aspects in the valuation process.
Staff and Management
Your existing staff and management team are an important part of your overall business valuation and future success and will be central to the mergers and acquisitions process once a deal has been completed. Remember, we will never contact your staff during the valuation or sales process! Post-closing, a dedicated and experienced team can help facilitate a smooth transition and bring extensive experience and knowledge to the new business owner as they work towards a seamless integration — or if your prospective buyer is looking for a turnkey business that is ready to start generating income.
Brand Recognition and Favorability
Your brand is the face of your business, and consumers recognize your brand as it aligns with your products or services. Favorable brand recognition and product loyalty are important for generating long-term revenue. Suppose you are firmly positioned in your industry as a market leader with high customer loyalty. In that case, this will factor significantly into your long-term growth projections and the overall value of your business.
When looking at a valuation, it can be easy to forget about these intangibles while studying lines of a spreadsheet, but A Neumann & Associates, LLC will ensure that your valuation tells far more than these numbers indicate.
Recast Cash Flow
We will recast your cash flow based on your tax returns over the past three years, current year, and projections for the next three years. This is an important step because tax filings are typically prepared to minimize tax burdens, which can ultimately lead to an inaccurate valuation of your business, if taken at face value.
For example: if your business shows $100,000 of profit on $5 million in revenue, this can greatly impact the sales value of your business, especially if many of the expenses were for owner compensation and other owner-specific expenses. When these are recast, profit on your cash flow statement may increase substantially, which will significantly increase value, plus can be important when the buyer is seeking a loan for the acquisition of your business.
Contact A Neumann & Associates, LLC
If you are considering selling your business, please contact us to learn more about our comprehensive service spectrum. Our experienced professionals will answer all your questions about selling a privately held business in complete confidentiality. Please to fill out a short form, or call us at (732) 872-6777. We will contact you directly and will never identify ourselves to your employees.