Business Valuation
Business valuation is at the foundation of what we do. Determining an independent value is essential to guiding major financial decisions, whether it means selling your business, pursuing an M&A transaction, attracting investors, implementing management incentive plans, facilitating partnership buy-ins or buy-outs, estate and tax planning, or settling legal disputes.
Without a comprehensive valuation, owners risk overpaying, underselling, or making misguided strategic decisions that can significantly impact their long-term financial success. Decosimo professionals have earned the highest valuation credentials and bring over 50 years of experience working with hundreds of businesses across a wide range of industries. As experts in the field, we have served as expert witnesses in litigation, including providing testimony in the United States Tax Court.
Our valuation expertise has been critical to our involvement in the rollup and financing of the Coca-Cola and Seven-Up bottling franchise system, five Major League Baseball teams, floor covering and textile manufacturers, and many manufacturing, distribution, and services companies.
Valuation of My Business
What is the reason for the valuation?
This is the first question to be asked. Reasons for a valuation are many – whether for a sell, an acquisition, sourcing outside equity, estate planning, or developing a stock incentive plan. The reason for the valuation will dictate how the valuation is prepared.
How do you determine the value of a business?
A business valuation typically consists of a multi-step process that involves analyzing financial performance, performing market comparisons, and evaluating future earning potential. Industry conditions, growth prospects, and operational risks are also considered in the determination of an opinion of value.
What financial information do you need?
Typically, we review several years of financial statements, tax returns, financial forecasts, and organizational documents. Additional information, such as customer concentration and customer and supplier contracts, may also help provide a clearer picture of the business.
How long does a business valuation take?
Most valuations can be completed in a few weeks, depending on the complexity of the business and the availability of financial documentation. More detailed valuations may take longer if additional analysis is required.
Is the value the same as the selling price?
Not necessarily. A valuation provides an estimate based on financial and market data, while the final selling price ultimately depends on negotiations, buyer demand, and deal structure.
What factors can increase or decrease my company’s value?
Strong financial performance, diversified revenue streams, recurring income, and a capable management team often increase value. Heavy owner dependence, inconsistent earnings, or customer concentration can lower perceived value. At Decosimo, we leverage our extensive transaction and valuation experience to provide our clients with more than just a number. We ensure our clients understand the factors that drive the company’s value.
How do you mitigate the effect of not having an annual audit?
At a minimum, when working with a company that does not have audited financial statements, we encourage the company to have an independent accounting firm observe the year-end taking of inventory and to prepare cut-off procedures on the sales and payables and accrual cycles.
How do you compare my business to others that you have sold?
We analyze comparable transactions, industry valuation multiples, and market trends to benchmark your company. This comparison helps determine how your business aligns with others in your industry and size range.
Featured Transactions
Browse a sampling of transactions completed by Decosimo.
