Mergers & Acquisitions Advisory

A Neumann & Associates, LLC

March 2, 2013

“I don’t need a valuation. I KNOW what my company is worth.” = Big Trouble

By Joseph Eneldas

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Accountants and licensed CPA firms will be the first people to corroborate the assessment– that valuing a business is a specialized discipline that requires specific expertise. While accountants and professionals do play a key role in the gathering of necessary current financial information, they rarely offer accredited business valuation services because industry specialization is required to properly perform them.  Financial professionals will advise clients if asked, to seek out an independent business valuation from a qualified firm to determine true market value.

Here at A Neumann & Associates, our challenge is to help business owners understand that a “rule of thumb” number provided by an accountant or related professional, is simply a snapshot in time, and not a credible number on which to base any critical decisions.  Valuations that are not done independently carry no weight for buyers or lenders.  They can only be used internally.

According to Achim Neumann, President, A Neumann & Associates, “Our valuation firm uses an in-depth valuation process that includes a myriad of different assessments.  Using only one approach, (while it may seem attractively simply), could lead to catastrophic mistakes in a business owner’s decision making process. “

Book value (Asset/Cost Based Approach), for example, is one of just seven approaches that the professionals at A Neumann & Associates obtain from the valuation firms. Each independent valuation will value differently according to relevance, certain weighted averages and measures, in a blend of the various valuation methods.  In many cases, particularly in strongly cash flowing enterprises, the book value will carry little to no weight in the overall value analysis of the business.

According to Neumann, “Because we are involved in so many deal making experiences, our business brokerage firm has unique insight into the buyer side of business acquisitions.” Qualified buyers will be looking for an “arms-length,” independent Third-Party valuation of a company when considering a purchase.  Not having one will work against sellers, signaling to buyers, that you are not serious or not prepared to sell your business.  Keep in mind that personally derived valuations carry no credibility for buyers or lenders.

Examples of BIG TROUBLE…

  • Imagine self-valuing your company (or taking your Accountants “rule of thumb” value) that is too high and basing major decisions like business sale, capital expenditures, labor force hiring’s, etc., on a “number” that has no factual financial backing in the marketplace.
  • The majority of a business owner’s net worth is usually tied up in their business. Yet, at A Neumann & Associates, we see owners again and again who are misinformed or have no idea of their company’s actual value.
  • The same holds true for the opposite scenario. Undervaluing the worth of your businesses may lead to missing out on existing market opportunities that may have been funded by your actual increase in Fair Market Value.

Lesson: Don’t find out ten years from now—do it now. Your business needs a report card. Assess where you are today… so you can be headed in the right direction tomorrow.

About A Neumann & Associates, LLC

A Neumann & Associates, LLC is a professional mergers & acquisitions and business brokerage firm having assisted business owners and buyers in the business valuation and business transfer process through its affiliations for the past 30 years. With an A+ Better Business Bureau rating, the company has senior trusted professionals with a deep knowledge based in multiple field offices along the East Coast and has performed hundreds of business valuations in its history. The firm’s competitive transaction fees are based on successfully completing transactions. For more information, please contact A Neumann & Associates at 732-872-6777 or info@neumannassociates.com

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Client Testimonials

“I recently contacted A. Neumann and Associates about getting a valuation of my business done. I spoke with Marc, who explained the process in detail. After meeting with Marc in order to get a clear understanding of my business, and what I was hoping to accomplish. His patience in answering all my questions and his knowledge of the proper way to market my business gave me great confidence that this is the firm I will be using to sell my business for max value. Working with Marc at A Neumann & Associates was very easy and professional. I did not know all that was going to be involved in selling my business but they helped me through the process. What I thought was going to be a just another one of those pushy sales companies was just the opposite. Polite, knowledgeable, and a pleasure to talk to and deal with. I highly recommend this firm to anybody who wants to sell now or down the road. Marc not only knows his stuff, but actually is a real nice guy.”

Double Diamond

“Used A Neumann & Associates to sale my business. could not imagine having done it with out the patience and experience Gary provided. Thanks Gary,”

Dennis Frazier

“Working with Marc and his company was a pleasure. What I thought was going to be a just another one of those pushy sales companies was just the opposite. Polite, knowledgeable, and a pleasure to talk to and deal with. Marc handled most of the interaction and he has one of the greatest demeanors. Again, it was a pleasure working with him and his firm.”

Douglas DiCeglio

“I recently completed an acquisition using A Neumann & Associates. Tony Valentino was very helpful and accessible during the entire process. They do a thorough job vetting both parties and got us to the finish line.”

Srini Mudambi

“Claus out of Florida helped us with the sale of our business. We had never done anything like this and him and his team walked us through the process from start to finish. We had some challenges through the process and Claus continued to show up even in the difficult conversations.”

Colby Harris, Co-Owner, Del Mar Designs

“Claus Madsen thoroughly helped us with selling our company. From the 1st introductory meeting explaining to us what was possible, to providing us with resources to assist with the sale. Claus was invaluable throughout the whole sales process. Claus was with us every step of the journey and always made himself available for any questions or issues that came up along the way. If you are interested in selling your business, I encourage you to reach out to Claus and the ANA team so that they can let you know what’s achievable. These guys will make it happen!”

Ron Harris, Co-Owner and Vice President, Del Mar Designs

“A Neumann & Associates is the only business broker I would use or consult with. They have assisted with 3 business sales over the past 15 years with me. They are honest and sincere and have always performed better than my expectations. They are the only one i would use for the sales of my businesses.”

James Belanger, Business Owner

“I wanted to take a second to commend the exemplary customer service from both you [Karin Neumann] and Mr. Valentino. It’s both a rarity in the industry, and very much appreciated.”

Andrew G., Investor

“We worked with Neumann & Associates to investigate the purchase of a research company in 2010 and found Achim to be capable, forthright and realistic. His depth of experience enabled us to fully understand our options, offering creative options that might enable the acquisition. While we didn’t acquire that particular company at that time, we know exactly who to call whenever we’re looking to buy or sell a business.”

Daniel Coates, Buyer

“Purchasing a business through this firm was a pleasure. Gary was very professional and transparent throughout the entire process. I look forward to working with A Neumann & Associates in the future.”

William Klemens, Buyer
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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 fill out our contact form, or call us at 732-872-6777. We will contact you directly and will never identify ourselves to your employees.

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