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Has anyone had to have there business appraised and were they surprised at the result. Were they able to honestly look at the business and say yes I could get that for it. My experience is that appraisals are usually too high. If business is appraised at 200k higher than what I actually believe it is worth then I am stuck in a situation. I suppose the real answer is to have it appraised and find out. Anyone had to have a business appraised?
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The solution to that is to get multiple appraisals. Three would give a good idea of value. You then take the average of the amounts and put it forward in your offer. -
Can you not have it appraised "on the down low" and only when you find an appraiser give you a figure you like then use that in court and have the appraiser testify.Comment
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Sure, and the other side could likely do the same. And the court would likely view both for what they are. Which is a fishing attempt to undermine the other party.Originally posted by Links17 View PostComment
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How about ...
You send your ex a list of five possible appraisers. Ex sends you a list of five possible appraisers. You agree on three of them. You and ex agree that you will go with the average of the three appraisals. All three appraise the business. The cost of the appraisals is deducted from the value of the matrimonial property.Comment
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Or just do a guesstimate of the value of the business that you can both agree on, and save the cost of three appraisals. Those can be very expensive!Comment
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I had my corporation appraised. They take your books from past three years and they may interview you to understand a bit about the business.
The basic formula is that they take earnings after taxes and depreciation/amortization and then multiply it by three or four. Depending on the growth rate of your industry... Software higher...a slowing industry would be lower.
So if your company has revenues of $1m and after payroll (including yourself) and all other expenses it earns $100k then your company is worth roughly $300-$400k.
If as with most small business you show no earning or a loss they just look at the balance sheet. So if you have $200k in cash/assets it would be worth approximately that.
I found mine to be fair. If you get a good guy he will appreciate some business just won't run without their owners and discount based on that.
Hope that helps...Comment
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I beleive it is called ebita. Earnings before interest taxes amortization and depretiation. I did not know the multiplier. I am happy to know they take into consideration owner staying or leaving. Multiple appraisers can add up real quick.
Thanks for the feedback everyoneComment
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EBITDA. <remainder moved to other thread>Comment
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What does this remainder moved to other thread mean. I obviously need some lessons.Comment
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I dont know either. If you're in the Toronto area then private message me and I can recommend a good evaluator.Comment
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You've got several threads on the go. Probably his other comments were better suited to be in one of your other ones.Originally posted by Craigerst View PostComment
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