Business Valuation Division | Phasecorp Business Valuation Services in Chicago and Suburbs PDF Print E-mail
business valuation

A

t some point in time, every business owner wonders: "How much is my business worth?" After all the effort you've expended to build your business, its nice to know that you've built a significant asset.

B

usiness valuation is partly an art and partly a science. Computing the value of the company's tangible assets usually poses no major problem, but assigning a price to the intangibles such as goodwill, almost always creates controversy. The most important things to know about business valuation are:
  • It's a combination of art and science;
  • It's not fixed (knowing how the valuation is done can help you increase the value of your business); and
  • It's an educated guess.

T

rue business valuation (i.e., getting the "fair market value" of your business) truly occurs only when you sell a business at arms-length. Only then are all of the factors the effect valuation (including payment terms) known. However, by using certain methods, you should arrive at a value range for your business.

T

he first step in any valuation is to analyze the business, its assets, history and market. Of course, a valuation is only as good as the information about the business. So, its critical to ensure all of your information is accurate and complete.

C

entral to this analysis is financial information. Accurate financial recording keeping is essential to establishing business value. Yet, often financial information must be legitimately "recast" to reduce the effects of tax decisions and owner benefits, and to be able to compare the results against other similar businesses.

There are four basic business valuation methods:

1Asset Based Valuation;

2Market Based Valuation;

3Earnings Based Valuation;

4Cash-Flow Based Valuation.

Useful links:



Business Valuation Calculator Business valuation is typically based on three major methods: the income approach, the cost approach and the market (comparable sales) approach. Among the income approaches is the discounted cash flow methodology – calculating the net present value ("NPV") of future cash flows for an enterprise. Visit
 

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Phasecorp...

... is a professional business brokerage, middle market intermediary and business consulting firm. We provide complete mergers and acquisitions, valuation and management consulting services for privately held companies of both small and medium size.

Using our proprietary methodology, Phaseology™, we analyze your company’s various performance matrices. Strategic business planning is a structured process that can help you translate the bigger picture into a set of prioritized strategic action plans with clearly defined accountability, outcomes, and deadlines.

The Financial analysis will review and assess your complete fiscal health. We can help you design, implement and manage budgeting processes. We are able to combine global and local economic research with industry specific information to levy the accuracy and completeness of data on which forecasts are based. We also facilitate workshops to expand the knowledge base of both business owners and their staff. Balance sheets, profit and loss statements and cash flow benchmarks are key indicators in creating and building PROFIT. Maximizing your asset viability and cash flow utilization rates and minimizing unwanted corporate liability are vital in creating your fiscal longevity.

Each of the Operational reviews conducted is unique and client specific. It can be all encompassing or specific to the activities of one department or division. An operational review will provide your organization with a better understanding of the drivers that lead your business success. An objective review of how your business operates and an understanding of how your competitors manage their operations will give you a greater comparable visibility. Providing you a clear guide to your corporate enhancement potential with a comprehensible action plan to ensure that improvements are realized is our utmost priority. Each review encompasses a proven methodology which evaluates operations, business strategies, industry benchmarks, best practice guidelines, and trends using our Phaseology™ proprietary methodology.

We will review Sales performance to determine and design your future measurable results that focus efforts on increasing you revenues and profits and provide qualified prospects that can be closed. Our recommendations are based on current market data, analysis and our extensive business expertise, allowing our clients to make quick, smart and accurate business decisions. Our goal is to be responsive to our clients - to listen and react immediately when clients need our expertise or assistance.

Our business brokers, consultants and analysts teams use proven methodologies to create a viable fusion of exit strategy planning, business valuation and strategic consulting designed to create and increase the intrinsic value of your business.