What Information To Provide Your Business Valuation Specialist?

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No matter what business you are into, time will come when you will have to get your business appraised by a valuation specialist. At such a time, it is important to know just what to expect and the kind of information that you will need to provide.

In many cases, companies seek business valuation under the following circumstances:

  • To get ready for the sale of the business
  • If there is a change in ownership – the primary owner leaves the company, for instance
  • As a part of the requirements for a significant loan to grow the business

How does the business Evaluation Process work?

The procedure begins with a call to a business valuation firm like the “Rushmore Group“. You will be talking with an appraiser who focuses on these types of assessments.

In addition to the visual examination of the property and stock checks, someone (generally the owner or someone designated) must muster documents and other information to be used in the report which includes:

  • A comprehensive description of exactly what is for sale. Is the whole business for sale, or just the assets? Is this going to be a stock sale?
  • Specifications about what is not for sale. Are there any assets or service that you would like to exclude from the sale?
  • A history of the company, so the appraiser can learn about the company for the function of valuing its liquidity, viability, and solvency. This part of the appraisal is especially important when the business has stock, or there are several owners.
  • A balance sheet for each quarter for the past 3 to 5 years (depending on the length of time the company has been in existence).
  • Income declarations and other monetary statements for each quarter for the previous 3 to five years (depending on for how long the business has been in existence).
  • Company fiscal projections (balance sheets and earnings declarations) for five years, if offered.
  • Details on the market and the company’s market share in that industry.
  • Comprehensive market details of the business’s market.
  • A comprehensive competitive analysis, including top rivals and their products/services.
  • The business’s legal type and ownership structure, consisting of owners and portions of ownership.
  • Tax returns for the past three to 5 years. If the business is a pass-through entity, like a sole proprietorship, collaboration, or LLC, the evaluator will likewise need to check the owner’s individual income tax return
  • Discussion of any audits or IRS scrutiny of the business, and the outcomes of those audits.
  • Information on liens taken against the business
  • All litigation (lawsuits) in the past 5 to 10 years (both settled and ongoing).
  • Resumes of all business owners (unless a public business), officers, and top management executives.
  • Present month-to-month payroll data – a variety of staff members and their functions.
  • An existing organisation chart
  • A summary of product stock quantities for each product (from physical inventory) for the previous three years.
  • Details on present consumers – a client list, if possible.
  • Payment history of clients, including the balance dues ageing report, for the last three years.
  • Details on agreements with top executives and managers
  • Information on obligations for retirement strategies, earnings sharing, stock alternatives, and bonus offers.
  • Existing copyright – patents, copyrights, trademarks/service marks – and all license arrangements.
  • A listing of all company advisers – attorney, Certified Public Accountant, experts and any contracts or retainers.

The information mentioned above might seem excessive, but all of it is necessary if the valuation specialist is to gain a complete understanding of the business’s financial position, commitments, and management strategies.

Would you like to learn more? Check out other reputable sources on the web that delve into the matter similar to what you can find at http://rushmoregroup.com.au/business-valuations/. They ought to be able to help you with everything you need to know about the process of business valuation.


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