Minority shareholdings are usually valued by discounting the value of the whole company to reflect the reduced control and other rights that a minority holding would have. The smaller the holding the larger the discount.
Businesses are often valued on a profit multiple which needs to be applied to the underlying sustainable profitability. Often this is not the same as the results in the accounts, as it needs to be adjusted for one off items. In owner managed business there will often be costs that are specific to the owner that can be added back.
Any goodwill in your accounts is probably because you bought a business in the past. We’ll typically value your business based on current earnings and in most decent businesses that gives a higher figure. People often also use the term goodwill to describe the special value of their business based on factors like its results, its intellectual property, brand, products, and customer base. If these things are real they will usually drive a premium value above asset value.
We don’t have to visit but we do like to have a meeting with you to find out about your business. This can be done at our office, at a different location or over the phone. We are flexible.
We use a range of proprietary M&A and industry databases to get the information we need. A review of comparable companies and transactions is a key part of our work.
The short answer is that you get what you pay for! Online calculators are often over simplistic and generic. In contrast we work with you face to face to understand your business by studying not just its financial data but also the intrinsic features that make it special.
We do financial analysis and study the industry that the business sits in. We explain our choice of valuation method and share our benchmarking research to show you how we’ve arrived at our valuation.
Our valuation reports give you detailed insight insight into what your business is worth and why. We use our data resources to benchmark it and we take the time to understand your business. So we’ll ask you for financial information and the opportunity to have a detailed conversation.
It depends on the size and complexity of the business but we can usually give you an estimate based on a telephone call with you. We usually charge a fixed fee.
We aim to have our valuation report with you 3 weeks from date at which we have all of our data requests fulfilled and have had a fact-find meeting with you. If you have tighter deadlines, we’ll do our best to meet them.
It depends on the nature of your business. But it’s good valuation practice to corroborate the value derived using one method with other methods. We consider all appropriate methods and will set out in our report the reason for our choices.
We don’t do standalone valuations of Intellectual Property (IP) rights. However, they can often be an element of a Company valuation. IP is a specialist area and if it is an important part of your business, we can introduce the right specialists to value this aspect of your business.
