Business valuation services are a means of identifying the value of a business at a particular point in time. A business valuation can be used to assess the performance or status of a business and is often required when a transaction needs to take place. The valuation is a full written report which will outline the basis of the valuation method used and provide an independent opinion on the worth of the business. Depending on the nature of the transaction, the report can then be used to advise the client on whether, for example, selling their business is a viable option.
When is a business valuation used?
- When a business owner is looking to sell their business
- To help a management team understand if an MBO is a viable option
- To set up an employee share scheme
- To identify how a business can be restructured if shareholders are existing
- When a company is looking to acquire another business
- To assess an individual’s net worth when one party in a divorce is a business owner
- To help business partners who need to divide assets, perhaps due to a conflict
What can you learn from a business valuation?
A business valuation can help you to learn the value of the identified business at a particular point in time. It can help advise on the direction and strategy of the business or its cost base. However, it is worth noting that this valuation should not be used for other purposes at a later date, as the situation may have changed.
It may be the case that additional costs need to be included, such as premises costs and director’s remuneration, to give a more accurate reflection of the trading position of the business. For this reason, there are a number of different methods and models which can be used to value a business. A valuation report will explain these different options and determine which is considered to be the most appropriate.
Why choose Rayner Essex?
At Rayner Essex, we are highly experienced in business valuation services. The valuation is partner-led and we will always take the time to understand your business, its structure and the underlying reasons as to why a valuation is needed. We will prepare a full written report which will detail the scope of our work, our view on the appropriate valuation model and conclusion of our opinion on the value of your business. We will then take the time to discuss the report with you in detail and go through any follow-up questions which you may have.
In some cases an Expert Determiner may be required to value a business or it may be requested as part of a divorce process. One of our partners is an Associate Member of The Academy of Experts and would be happy to discuss with you how he may be able to assist in these scenarios.