Business Sale Valuations – A business valuation is a certified professional document that undertakes due diligence, process and procedures to predict an economic value of a business and/or company.
What is a Business Broker?
In essence, a business broker is a person or person(s) who assists business owners sell their business. A business broker can also assist an interested buyer in purchasing a business for sale, or negotiate an existing business that has not been listed for sale yet.
Do Business Brokers Value Businesses?
Business brokers may appraise a business, but they cannot value a business. Although in court, an appraisal and a valuation are treated as the same, in the world of valuation, an appraisal is not considered a valuation. A business broker can value a business should they hold the following licenses:
- Registered Business Valuer (RBV) – Australian Institute of Business Brokers
- Certified Business Valuer (CBV) – Australian Valuers Institute.
They are the most common corporate bodies that govern business valuers all over Australia. There are other corporate bodies that govern business valuers that are not listed above.
Equally, the above corporate bodies enforce the International Valuations Standards, who set rules and guides through Business Valuation and Business Sale Valuations Australia wide.
Why is it Important to engage an Independent Business Valuer?
First and foremost, when you engage a business valuer, they are independent and unbiased. They are not influenced to value a business at a certain value. They hold the relevant licenses and skills to perform a thorough valuation report independently. Although business brokers may know what the business should sell for, its always a good idea to get a validated opinion to set the market price. This also gives the buyer confidence with the purchase price.
How Does a Business Valuer Value a Business for Sale?
Asset Valuations Group follows the international valuation standards when calculating the value of a business. The most common way to value a business is to follow the Market Approach, considering the Capitalisation of Future Maintainable Earnings. The market approach considers both risk assessments and recently similar sold businesses. Through this we are able to predict the measure of earnings (EBIT, EBITDA, PEBIT, PEBITDA) and the multiple used.
In the event of an asset rich company, where the value of the assets exceed the value of the future maintainable earnings, we consider utilising the Cost Approach, considering Asset Method. The asset method relies on the value of the assets to ascertain the business value. In almost every case, the business valuer will appoint a third party asset valuer to value these assets, and not just rely on the business balance sheet.
Why Choose Asset Valuations Group?
We have an internal asset valuer who is able to value all assets. We are a complete valuation firm located all over Australia. All our valuers are registered through the AIBB and the AVI. Our first and foremost mission are our clients. Our valuation reports have been trusted by large corporations, businesses, high profile individuals and of course the court. Our head office is in the heart of Brisbane City, Level 7,190 Edward Street. Contact us today to see how we can help!