Business Valuations

Putting a value on your business can be complex but it is an important part of being a small business owner and knowing your worth. This could be because you need to take a loan,  you are considering selling your business or perhaps you are to buy out a business partner.

Working with expert business accountants can help simplify the valuation process so you get an accurate valuation and thorough assessment of your company’s worth.

At Mollan & Co, we have extensive experience working with SME businesses. Whether you’re preparing to merge with another business, sell your company outright or purchase a new business, our expert accountants offer clear and effective guidance for your unique circumstances and goals.

Get in touch today to book a free, no-obligation valuation consultation.

What is a business valuation?

Business valuation is the process of assessing the financial value of an asset or company, often with the goal of selling the business, merging it, or acquiring a new business (if you’re on the other side of the equation). It’s vital that valuation processes be carried out thoroughly and accurately, as your bottom-line business value is used to make big decisions. 

How is a business valued?

There are many valuation methods – Mollan & Co uses multiple methods for a valuation:

1. Income-based valuation

This method, which includes techniques like Discounted Cash Flow (DCF) and Capitalization of Earnings, is ideal for businesses with predictable income streams. It assesses the present value of future cash flows and is particularly useful for evaluating long-term financial health.

1. Market value-based valuation

Using Comparable Company Analysis (CCA) and precedent transactions, this approach is great for businesses looking to understand their value in the context of the current market environment. It compares your business to similar ones, using financial metrics from recent sales.

1. Asset-based valuation

This method is crucial for businesses with significant tangible assets. It calculates the company’s value based on its assets minus liabilities and includes approaches like book value and liquidation value, providing a clear picture of what the business could be worth if it were to cease operations or sell its assets.

1. Earnings multiplier

This approach adjusts the earnings before applying an industry-specific multiplier, offering a quick estimate of value based on current earnings and market conditions. It’s useful for businesses with significant growth potential.

Why do you need your business valued?

The main reasons for getting an accurate business valuation are if you’re buying or selling a business or merging it. However, there are other reasons you might need your small business valued, including:

• Tax planning
• Legal disputes
• Divorce 
• Strategic planning
• Fundraising
• Employee Stock Ownership Plans (ESOPs)
• Succession planning
• Financial reporting
• Insurance coverage
• Regulatory compliance
• Buy-sell agreements
• Declaring bankruptcy
• Business dissolution proceedings
• Re-financing

 

Our valuation services include:

1. Market capitalisation

Our detailed analysis considers all elements of your business to provide a comprehensive and definitive valuation.

1. Real estate valuation

We will factor all real estate holdings (buildings or land) into the process, ensuring a precise assessment. We work with external property valuation experts

1. Machinery and equipment valuation

We ensure physical assets like machinery and equipment are appraised based on condition, market value, and replacement costs.

1. Goodwill impairment testing

We will assess whether any extra value added to a company’s books after buying said company is still worth the initial payment

1. Litigation support valuation

We provide litigation support valuation that is thorough and defensible, so you have reliable and precise data for use in any legal context.

1. Fair value measurement

Our fair value measurement services ensure that financial statements accurately reflect the value of your assets and liabilities, making partnerships with investors and partners transparent and trusting.

1. Purchase price allocation

We identify the value of all acquired assets and liabilities, helping you with post-acquisition integration and accurate financial reporting.

Valuation pitfalls – Things our services will help you to avoid

Subjectivity

Our outside expert counsel helps you to apply a more subjective method to the valuation, leading to an accurate result. 

Market conditions

Changes in markets can impact your business value. We will help you to navigate volatile and rapidly changing market conditions, such as Brexit uncertainties, and economic shifts.

Data quality

Our rigorous accounting standards will help you to navigate incomplete or inaccurate financial records, avoiding unreliable valuation.

Bias

Our outside expertise will help you to avoid personal bias, making the assessment fairer and more comprehensive.

York accountants for valuation services

The company valuation process provides a quantifiable measure of a business’s health, potential and market value, which is vital for transparent and effective management and future planning. It’s important to be thorough, accurate and objective when carrying out this process.

With Mollan & Co preparing your accounts, you’ll have our support and expertise every step of the way.

As valuation specialists with more than 40 years of experience in successfully helping companies to assess their value, we work hard to ensure that each component of our clientele’s business is assessed thoroughly, providing a true reflection of their worth.

Contact Mollan & Co for a free, zero obligation valuation consultation.

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