Welcome to Alliance Business Brokers, LLC. We've been providing Business Valuation Services, also known as Business Appraisals for Business Buyers and Sellers throughout Massachusetts and New Hampshire since 2002. We have the knowledge, resources, and experience to perform your Business Value Analysis or Business Valuation.
Do you need to know the value of your business? Which is right for you, a Business Value Analysis (also called a "Calculation of Value") or a formal Business Valuation? What's the difference?
We are asked by many business owners "How much is my business worth?" and "How much could I get if I sold my business now?" "What about if I waited?" or "What can I do to increase the value of my business?"
A Business Value Analysis Report is a tool used to determine the Most Probable Selling Price of a small business (Annual sales of $5 M or less). It is prepared by recasting and analyzing the most recent financials of the business to determine the Discretionary Earnings. We then research the selling price of businesses similar to the subject company and determine the multiple to Discretionary Earnings for which those businesses sold. This is the starting point. The Institute of Business Appraisers (IBA) calls this method the Direct Market Data Method (DMDM) and states "it is the preferable method for valuing closely held businesses of midsize and smaller". In addition to the multiple to Discretionary Earnings, we will analyze a number of other factors to establish the Most Probable Selling Price.
Why Consider a Business Value Analysis rather than a formal Business Valuation? In a word - cost. The difference could be thousands of dollars between a Business Value Analysis and a formal Business Valuation. It is by far a much more cost effective form of establishing a probable selling price for a business and is our most requested business valuation service.
The Business Value Analysis Report is appropriate if the purpose is to:
It is much more cost effective than a formal Business Valuation. There are a few factors in determining the cost. Please call or email us. We can then confirm that the Business Value Analysis Report is the right product for you and will then be able to give you a quote.
From the time we receive the necessary documents, it generally takes about 10-14 days to receive your report.
A Business Value Analysis Report given to the client that clearly shows the result of the recasting, analysis and appropriate multiple selected. The report will list what the Most Probable Selling Price would be and will outline a recommended asking price. Further, it can also be used as a tool for a business owner to learn how his or her business may be viewed in the marketplace by prospective buyers. Finally, this tool may help the client implement value drivers to enhance the value of their business for a possible future sale.
In addition to the Business Value Analysis described above, Alliance Business Brokers, LLC offers formal Business Valuations through our strategic partners. In many instances, the formal Business Valuation is required to meet the needs of the client. The descriptions and purpose for these more extensive reports include:
Although USPAP and the American Society of Appraisers address only a single format for written reports, many appraisers offer a "summary report". The Institute of Business Appraisers acknowledges this report in IBA BV Standard 4.1 and notes that "By its nature the letter form of report is an instrument of brevity. It should contain at least a summary of the material factors that led to its conclusions, but is usually intended by the parties [to the appraisal engagement contract] to reduce the normal appraisal burden of writing a comprehensive report, and thereby allow the client to realize some economic benefit. However, the appraiser is still required to perform materially the same investigation and analysis as would be required for a comprehensive report and maintain in his files the work papers necessary to support the conclusions stated in the letter form report." These summary reports are usually between 30 and 60 pages and are typically used for the following purposes:
This is a formal presentation of the value of a business in a self-contained written report. If a valuation has the potential to go to court, or if the report needs to be reviewed by others, such as the IRS for tax implications, this type of report explains in full detail how the value was derived. Uniform Standards of Professional Appraisal Practice (USPAP) and American Society of Appraisers (ASA) address the above as a "Comprehensive, Written Business Valuation Report". The Institute of Business Appraisers (IBA) addresses the above as a "Formal Written Report". Typical uses are as follows:
These are more extensive reports and can take 3-4 weeks in the case of the Summary Business Valuation Report and 4-6 weeks in the case of a Self-Contained Business Valuation Report.
We can quote the cost after discussing your specific needs and report type that you required.
Q. How do I know whether I need a Business Value Analysis or a formal Business Valuation?
A. It depends on the purpose of the appraisal. If it is (1) to establish a probable selling price; or (2) for business or estate planning; or (3) for a partnership dissolution where all partners are in agreement, then a Business Value Analysis will be the most cost effective solution.
However, if the purpose is for (1) an SBA loan; or (2) for litigation support; or (3) a divorce where the parties are in dispute of the value of the business; or (4) for the IRS; or (5) other 3rd party review, then a formal Business Valuation would be appropriate.
Please call or email us and we would be glad to go over it with you.
Q. What is the cost?
A. A Business Value Analysis is considerably less than a formal Business Valuation. In either case there are factors that will determine the cost and after we determine the appropriate solution we can provide a verbal or written quote before any work begins.
Q. How long does it take to have a Business Value Analysis Report?
A. From the time we receive the necessary documents, it generally takes about 10-14 days to receive your report.
Q. How long does it take to do a Summary Business Valuation or a Self Contained Business Valuation?
A. These are more extensive reports and can take 3-4 weeks in the case of the Summary Business Valuation Report and 4-6 weeks in the case of a Self-Contained Business Valuation Report.
Q. What is required to perform a Business Value Analysis or a formal Business Valuation?
A. It will depend on the assignment, but generally we will need Financial Statements and or Tax Returns for the business for the past 3 years. The appraiser will discuss with management information about the business, products and services, suppliers, key employees, marketplace, equipment, facilities, and any key issues affecting the business trend. A site visit may or may not be required depending on the assignment.
John Coto, Managing Member of Alliance Business Brokers, LLC, has over 20 years of combined experience in business valuation, business sales, equipment appraisal, consulting, equipment lease and used equipment sales and brokerage. Previously, Mr. Coto was President of Mass Micro Rentals, Inc. of Woburn, MA, a provider of computer leasing services and pre-owned computer equipment sales to customers throughout New England. Mr. Coto has also held domestic and international sales and marketing positions at various companies in the electronic printer manufacturing industry.
Professional designations and associations for John Coto, CBI, CMEA, include:
Certified Business Intermediary (CBI) by the International Business Brokers Association, the largest trade association of business brokers providing education in areas related to business valuations and business sales as well as professional designations.
Associate Member, the International Society of Business Appraisers (ISBA) The International Society of Business Appraisers is a professional society devoted solely to the appraisal of closely-held businesses.
Certified Machinery and Equipment Appraiser (CMEA) by the National Equipment and Business Builders Institute (NEBB Institute) CMEA's are located throughout the United States and several foreign countries, and are used by banks, other lending institutions, CPAs, attorneys, business buyers/sellers and others to provide needed financial information for a variety of reasons.
Associate Member of the Society of Business Analysts
Licensed Real Estate Agent