No Charge, No Obligation
We provide no charge, no obligation business evaluations for business owners. The purpose of an evaluation is to analyze the business to enable us to provide a broker’s opinion of value to include: helping the seller understand how the value is derived, an estimate of the net proceeds (which isn’t necessarily the business selling price), to identify obstacles to a successful sale and to possibly identify opportunities to increase the value of the business. In our experience, this is usually a very enlightening experience for small business owners. Often they learn things about their business that they didn’t necessarily fully understand.
To complete an evaluation, we need to spend about 30 minutes talking via phone to obtain preliminary information and another 60 – 90 minutes meeting with the owner to discuss all aspects of the business, its history and its current operations.
Computing Sellers Discretionary Earnings
At that first meeting, we must obtain 3 – 5 years of tax returns as well as the financial statements (income statements and balance sheets) for those years. We also need comparative year-to- date financial statements for the interim period of the current year. Using the financial statements, comparative spreadsheets are developed to identify business fluctuations on an account by account basis. The spreadsheets are also utilized to compute and document seller’s discretionary earnings (SDE), which in most instances is the critical component used to develop the valuation of a business.
Business Evaluation Report
Our business evaluation report includes the following five documents for review at a follow-up meeting (usually about 60-90 minutes) with the seller:
- Broker’s Opinion of Value
- Comparative Financial Results
- Comparative Normalization of Financial Results (SDE)
- Buyer’s Return on Investment Analysis (helps determine the appropriate selling price as well as the multiple applied to SDE by looking at 4-5 options)
- Estimated Analysis of Net Proceeds to Seller
Our Business Evaluation is Provided at No Charge with No Obligation
We are looking to develop long-term relationships with potential sellers so when the timing is right they will trust us with selling their business.
It is an unfortunate fact that only about 20% of small businesses ever sell. In addition to educating an owner on the current value of the business, an evaluation also helps identify obstacles to a successful sale. By taking steps to minimize or eliminate obstacles, an owner can turn an unsalable business into a salable business. To us, that’s the primary benefit of an evaluation – educating the business owner so that changes can be made to enable the future sale of the business. (It’s also the primary reason that Jim Stauder developed the How to Plan and Sell a Business website.)
To request a free business evaluation, you can complete the form below, or contact Jim Stauder at firstname.lastname@example.org. Or Jim can be reached by phone at 314-849-7679.