Business Broker for Engineering Companies Orange County – Assigning Value to Your Business

Are you thinking about selling your engineering company? If you are, the first thing you must do is assign a value to it. You will not be able to set a competitive selling price if you have no idea how valuable your company is. That is why the first thing you must do is perform a business valuation. While this task is best left to an experienced business broker for engineering companies Orange County trusts, it pays to learn a few things on how it is done. Here are the three key things you must do when assigning a value to your business.

There is no magic bullet for calculating the value of a business. The best you can do is come up with a range of values in which the sale price should fall into. There are three calculations a business broker for engineering companies Orange County trusts does to achieve this.

Calculate the floor

The first thing you have to do is find the bottom end of the value range. This needs to be the liquidation value of your hard assets. Your business broker will calculate the amount of money you would get from the sale of all your tangible assets. This will include your computers, furniture, machinery, cars and any asset that your business owns.

To get an accurate bottom end range, you need to determine the total amount of hard assets then subtract any loans that are connected with them. This will give you a liquation value. No matter what happens, your business cannot be worth less than the liquidation value.

Calculate the ceiling

Focus here is to get the high end of the range. For this, you need to analyze the company’s annual revenues. The goal here is to calculate how much the new owner will be able to bring in every year if all your current clients stayed with the company. The calculation for this is done based on one year’s revenue. If the average annual revenue before expenses is $500,000, that is the top end of what the new owner would pay for it.

Find the middle

Now that you have the bottom and ceiling value range, the final step is to find the middle. For this, you will have to take a look at what other engineering companies in Orange County are being sold for.

While the above calculations seem straightforward, there is more to a business valuation than this. Always make sure you work with a business broker for engineering companies in Orange County throughout the valuation process. Their experience will guarantee that you don’t end up with wrong figures.

Business Broker for Engineering Companies Orange County

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."

Calculate the floor

Calculate the ceiling

Find the middle

The Sales Process