Valuation

What Is Your Business Worth?

Let’s begin with the obvious, businesses that are properly valued sell, those that are not properly valued languish on the market. Why waste the time and energy to sell your company if it’s not valued properly? If you are expecting a dumb buyer with pockets full of cash, you might be playing Monopoly.  The real world does not work that way.

When we perform a business valuation, factors that we take into account include:

  • Cash flow history
  • Cash flow projections
  • Quality of assets
  • Quality of the brand (goodwill)
  • Recent comparable sales
  • Relative supply & demand of businesses for sale relative to capital looking for businesses to buy

Getting your business professionally valued also has the benefit of essentially forcing financial due diligence which an uncover issues that might bring a deal to a halt. By uncovering these problems upfront, you have the opportunity to resolve them before placing your business on the market.

How We Can Help

At Tennessee Valley Group, Inc. our process is thorough and reasonably quick, including:

  • Gathering data: To get an in-depth understanding of your company and industry, we interview you about your business history, organization, asset quality, trends, competition, and more. We will also do a strategic analysis of your company via what is called “SWOT” whereby we analyze your company’s strengths, weaknesses, opportunities and threats.
  • Normalization of financial statements: We take your Income Statement and add back those expenses that might be unique to the owner but not normally required operating expenses of the business. The point of this phase is to understand the true cash flow of the business.
  • Defining the best valuation method for your company:  There are three fundamental approaches for valuing a business. The asset approach creates a valuation using company assets and liabilities, while the market approach relies on marketplace data and the income approach evaluates the cash flow of the business. We use our experience to determine the best method(s) for your business and industry and apply it accordingly.
  • Arriving at the market value: After these methods are applied, we review every conclusion carefully to reach a specific valuation. Other factors will also be considered, such as current market conditions and availability of financing.

If you are looking for a Nashville business broker to perform a reliable and accurate valuation of your business, please fill out our contact form or call 615.390.9966 for a confidential consultation.

Take our valuation test in 3 minutes to learn how your company will be perceived by a buyer and how that will affect your multiple..

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