Business Broker for Advisory Firms San Diego – Comparable Transactions Method of Business Valuation

Knowing how much your business is worth is of utmost importance before you get it listed. Unfortunately, you will not be able to set an accurate selling price until you understand the true value of your business. The good news is a business broker for advisory firms San Diego that is well known can help with the valuation and pricing part.

Many business valuation methods are used to determine the value of a business. The method selected by a business broker for advisory firms San Diego will depend on the purpose of the valuation. In this post, we will be discussing the Comparable transactions method of business valuation. Let’s get started.

Business brokers in San Diego choose this valuation method mainly because of its unique advantages. The Comparable transactions method is faster, simpler, and more practical. This can, however, prove to be far from reality when done incorrectly. Keeping in mind the analysis is done based on assumptions; the analysis can lead to future discrepancies between the buyer and the seller. This is because sellers base their price on the next value generation or what the new owner will do with the business. This can lead to problems during the breakdown of negotiations. Both parties have varying expectations. Consequently, the discount cash flow method of business valuation is considered to be more accurate.

It is advised never to compare firms based on their sales volumes or profits lower than 50% of the target company. This is because the comparable multiples will become insignificant due to the vast differences between the company sizes. To get accurate valuation results, you must work with an experienced business broker with a comprehensive database of recent mergers and acquisitions and vast knowledge of your industry.

A business valuation is a preliminary task needed when selling your advisory firm. You must get it done right the first time. While performing valuation on your own might seem easy, it is not the best route to take. There are so many areas that have to be reviewed. Accuracy also depends on the knowledge of the person performing the valuation. The more experience a business broker has, the better.

The key to getting an accurate valuation lies with the person in charge of the valuation. Make sure you only hire a business broker for advisory firms in San Diego that specializes in the valuation and sale of businesses the same size as yours.

Business Broker for Advisory Firms San Diego

What Client’s Say

We Couldn’t Be Happier

"When we thought about selling we had no idea what our business was worth or how to go about selling. What you were able to do was to cut through the fog so that we understood the valuation issue and had a comfort level with the process. As you know we ended up selling for somewhat more than the original valuation and we got all cash and our CPA loved the way our tax liability was minimized. We couldn’t be happier!"

Over $250,000 More

"Our first contact with you shocked us when you suggested that we wait 18 months before selling because you believed that if we hit our projections that the value would be significantly greater. As it turned out we not only followed your advice but also got slightly over $250,000 more than we originally had hoped for. It is seldom that we have had the opportunity to deal with a firm that doesn’t want both money and a commitment NOW. It was clear and obvious that you had our best interests at heart."

You Got the Valuation We Agreed On

"You did a great job on the sale of our business in really beating the bushes for buyers, including a UK company that was an active suitor. You managed to get the valuation that we had all agreed upon and got it substantially all in cash and got the transaction closed with little to no problems or expensive lawyers involved."

Thank You for Handling Our Business

"Our business was smaller than what your firm normally handles but it was a BIG part of our net worth and savings. Thank you for handling our business and we were very pleased and delighted with the results."

More Than Anticipated

"Our transaction was involved as we had different corporate entities located in different states. Our only regret is that we didn’t retain your services before 2012 when we paid $25,000 to a firm in Texas that did a valuation and market analysis for us before then failing to do anything in the way of trying to sell our business. You got it sold for more than anticipated."

The Sales Process