Selling a Business
Regardless of the size, type and age of your business, selling it is a major event, involving a number of steps. In order to start the process, it is essential that you have an accurate, reliable assessment of the value of the business. Feeling confident in that appraisal will allow you to accurately determine how to price your business when searching for the right buyer.
Buying a business
Before purchasing business, you’ll undoubtedly do a great deal of research to find the one (or ones) that offer the right fit for your needs. At some point, this will entail — for the business or businesses you are considering — a valuation that you can trust, since so much of the negotiation depends on that value.
Mergers and Acquisitions
Among the many benefits of getting a timely and accurate valuation of your business are: an informed view of the worth of your business, a deep understanding of the relation of your business to others in your industry, an up-to-date picture of your financial situation, and being in a position to rapidly evaluate and exploit opportunities that arise in terms of capital investment, sales, mergers, or acquisitions.
Partner buyouts or disputes
In any transaction involving changing relationships between business partners, it is critical that you establish the fair market value of the company. No partner buyout can occur in a fair and accurate manner without an objective assessment of the assets of the business — both tangible and intangible. Any such transfer of assets is fraught with the potential for conflict. Thus, engaging a qualified, independent business appraiser on whom all the partners agree will go a long way toward minimizing the disputes. Should the partners be unable to settle on a single entity, it may require multiple appraisals which then will be combined to form an equitable final appraisal.
Many owners spend a lifetime building their company. Should they elect to pass down the business, a number of complicated issues are involved. These can include a logical way to divide the company, how to determine and allocate value, and dealing with complex tax issues. One of the key initial steps is engaging a business valuation advisor, whose mandate is to assess the business’s financials and evaluate its position in the market. That basis is critical to all the succeeding steps in the process.
Transfer pricing valuations are employed to establish the value of intangible property. Such valuations are required in situations such as the rights to intangible assets being sold outright, or transferred to related entities within a larger organization. Transfer pricing valuations must encompass the particular legal entity that claims ownership of an intangible asset. Instead of zeroing in on fair market value, transfer pricing valuations use what is known as the “arm’s length price” metric. This methodology takes into account an intellectual property’s current market value, as well as looking forward to extrapolate that same IP’s future value.