What is your business worth?
Are you a private company business owner or shareholder?
Did you know that over 90% of business owners do not know what their business is really worth? That most use an industry rule of thumb which is misleading at best and potentially damaging?
Your business is most likely your largest asset; why leave your future up to chance.
Knowing the real value of your business can help you understand the full value of your net worth. Planning for your estate begins with your business. No longer does the question, “What is my business worth?” have to go unanswered.
And today, the technology and methods exist for the first time to not only get a regular realistic valuation, but to develop strategies to optimize that valuation for an eventual exit, no matter how far in the future that might be.
At Avantt Partners we can provide you with a comprehensive and accurate business valuation which enables you to develop your strategy and help your family and business plan for the future.
Through four different measurements of valuation and a full breakdown of Key Performance Indicators, you will gain a deep understanding of your business value and how it is performing relative to your industry peers.
- Valuations calculated as Equity Value, Asset Sale Value, Enterprise Value and Liquidation Value
- KPIs include: Return on Equity, Receivables Conversion, Inventory Turnover, Fixed Asset Turnover, Debt to Equity, Interest Coverage Ratio, Cash to Debt, Income to Debt, Cash Flow to Revenue, Receivables to Income, Inventory to Income, Fixed Assets to Income and Total Debt to Income
In an Asset Sale, you are valuing what the name suggests, the assets. The sale of a business is often on an asset basis with the agreement of purchase reflecting the unique circumstances of the scenario. The Asset Sale includes ONLY Inventory/supplies, fixed assets and all intangible assets. It excludes all liquid financial assets and all liabilities. The new buyer operates from a newly formed legal entity and assumes it without any cash balances but also free of debt.
Equity Value is typically considered in middle market sales and includes everything in the Asset Value plus liquid financial assets less all liabilities. The new buyer assumes the business as it has been operating and is not a new entity.
Enterprise Value is a reflection of the firm’s value as a functioning entity and is helpful in that it facilitates the comparison of companies with varying levels of debt. The Enterprise Value essentially values the entire enterprise or the entirety of the “capital structure” instead of just the equity.
Liquidation value is simply the residual value after all assets have been sold and liabilities paid. There can either be a forced or orderly liquidation scenario where the orderly will always be higher. Forced liquidation is synonymous with a “fire-sale” and yields a lower value as assets are sold below market value.
Having a valuation done on an annual basis allows measurable growth and trajectory for the future. Plan ahead and implement strategies to grow your business for the future.
The most convincing track record any company can have, is an improvement in the business valuation and Invest-Ability Index™ metrics along with documentation showing what was accomplished for each.
Avantt Partners offers a unique business valuation service for privately owned companies. Our proprietary valuation service includes:
- A 25-30 page valuation report
- An accompanying analysis
- A strategy session to help you get started on a Valuation Driven Strategy to optimize the valuation of your company
- An outline of how to optimize the valuation of your company
- The opportunity to get an Invest-Ability Index™ score