Charlotte, NC -- (SBWIRE) -- 12/18/2012 -- Davidson Business Invesments of Charlotte NC have been taking the guesswork out of valuing your business for 45 years. Business Valuations are done for a wide variety of reasons and each one has different financial factors that utilize entirely different valuation methods. The firm will work closely with the business owner to determine which valuation to use for the appropriate circumstance.
The three main approaches to business valuations are: 1. Income based, 2. Market based and 3. Asset based. Additionally, there are multiple sets of methodology within each approach of valuation. Many business owners are unaware of how a business is valued and so a valuation from a trusted advisor like Davidson Business Investments can provide the framework necessary to complete a successful sale of a company.
The majority of small businesses operate their companies in a manner to minimize taxes. When selling, however, they need to know the true economic value of the business and to do this an expert will analyze the financials and eliminate all non-operating expenses and discretionary expenses.
"Most business owners are unaware of how a businesses is valued and, often sellers assume value based on emotion or rules of thumb," said a spokesperson with the offices of Davidson Business Investments,"they overvalue their business because of the amount of time and work they put in, and how much it means to them."
Once the financial recasting is completed a business valuation determines the value of the business that then can be utilized by both Seller and Buyer in their negotiations for a successful transaction. Davidson Business Investments will tend to be more conservative in the estimation than aggressive. If buyers believe the discretionary expenses have been exaggerated, they will conclude you are untrustworthy and likely making other misrepresentations and walk away.
As a rough ‘rule-of-thumb’ multiples using SDE will typically range from zero to four times seller discretionary earnings to estimate the value of a company. Factors such as industry, the attractiveness of the target, and other factors will detrmine the range SDE value with many using ‘2.25 SDE’ as a ‘quick and easy’ pricing and valuation method.
About Davidson Business Investments Inc.
Davidson Business Investments Inc. has over 45 years of combined experience representing the most elite clients in the southeast. We provide the support entrepreneurs need when putting up their business for sale and We make sure you find the right buyer and get the best possible price for it.
Davidson Business Investments