Valuation Process

Valuation Process

 

We believe credible and defensible business valuations can only be achieved by following all the steps in the process.

  • Full information (both operational and financial) underpins sound valuations. Curiosity is as important as calculating ability and the appraiser must ask lots of questions.

  • The value lies in the future earnings of the business so both internal and external risks and opportunities must be considered.

  • Financial accounts for most SMEs will require “normalisation” i.e. identification of discretionary expenses and reasonable owner’s remuneration.

  • All approaches should be considered and appropriate methods applied.

  • A Sanity Test should be applied to all valuation conclusions and a range is generally more accurate than a precise figure.

 

Business valuation process