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Business Valuation

Business valuation is complex and not something you should assume you know how to do!  Many women in business mistakenly assume their business is worth a specific multiple of gross revenue.  Business Valuation

ExitPromise.com Business Valuation Experts share their knowledge and latest thinking with women in business for the best outcome when selling a business.

Latest Articles and Posts:

  Women in Business Benchmarking to Improve the Value of a Business
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Free articles and business ideas for women entrepreneurs - Share our Passion

By Charles Laverty, Jr., ASA, CBA, CFFA

Understanding a company’s operating results is an important factor for women in busines to determine the value of a business.  However, the operating results must be placed in the proper context by comparing them to results of the industry as a whole. By doing so, a business owner is able to understand how they are doing financially relative to their industry peers.  This exercise is known as benchmarking.

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  Business Exit Planning: It's a Perfect Time to Transfer Ownership
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By Wayne Rivers, CEO Family Business Institute


With all the talk of a weak economy and soft business conditions, it’s sometimes hard to see a silver lining. However, one blessing that a rough economy brings is the opportunity for estate planning.  Right now is actually a great time to begin your business exit strategy; asset values are low, many senior generation members are worn out by the ups and downs of the business cycle and are seeking relief from the daily grind, “NextGen” family members are nearing middle age, and paying estate taxes is not as great a concern for most due to the high Unified Transfer Credit (at least for the time being).

Most family business owners, when it comes to estate planning, make things too complicated! The process can seem rather daunting, so we thought it might be helpful to create a short menu of “decision tree” options. Walking through the alternatives step by step might give you the clarity you seek when thinking about selling your business.

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  Understanding Business Valuations (Transition Plan for Female Business Owner)
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Free articles and business ideas for women entrepreneurs - Share our Passion

By Charles Laverty, Jr., ASA, CBA, CFFA

More often than not, the need for a business valuation arises when one of the four D’s occur (Death, Divorce, Disability, or Distressed Business).  In order to be a valuable tool, a business valuation should be used on a periodic basis to provide an owner with an appropriate value of their business, while assisting in the exit strategy process. A business valuation should not be merely the result of an event requiring it.

At some point in time, every female business owner will leave her business (voluntarily or involuntarily).  Through proper planning, an owner should expect to achieve her desired goals.  Statistics show that the value of an owner’s business accounts for over 90% of her  personal wealth.  However, more than 75% of all business owners do not have a formal transition plan in place.

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  Which Business Valuation Report Matters?
Free articles and business ideas for women entrepreneurs - Share our Passion

By Charles Laverty, Jr., ASA, CBA, CFFA

The various types of valuation reports produced by a business appraiser can be confusing to an entrepreneur, especially when the appraiser belongs to more than one valuation association.  Under most appraisal standards, a business appraiser can produce two types of reports: a detailed appraisal report or a calculation report.

The difference between the two reports is the content and level of information provided.  The appropriate report option and the level of information necessary in the reports are dependent on the intended use and the intended users.

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  The Application of Valuation Discounts
We Promise Article - Business Ideas for Women Entrepreneurs

By Charles Laverty, Jr., ASA, CBA, CFFA

When considering your business valuation and business risks in the hopes of selling that business, there are many factors to consider. One important factor to understand is the application of valuation discounts. The valuation of a controlling interest versus a minority interest within a privately held business can have different values, depending on the circumstance.  Due to the inherent differences between controlling and minority interests, the value of a minority interest is not equal to its pro rata portion of the whole.  This is a direct result of the application of minority interest and lack of marketability discounts.

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