Buying A Business Valuations

Are you about to buy a business or are you looking for merger opportunities?

Is there a business acquisition that will significantly increase the value of your business?

In-depth business valuations give you the confidence and the insights to negotiate an acquisition price from a position of strength - not hope.

Key Business Valuation Issues When Buying A Business?

What is the minimum market value you should pay for the business?
What is the most you should pay for the business and still make a return?
Is the business performance comparable to other businesses?
How will the business perform after buying a business?
What features of the business will add the most your business valuation?
What balance sheet issues will affect your business after the acquisition?
What is the strategic value to your business?
What strategies are likely to increase the performance of the business post-acquisition?

Our business valuations deal with these issues and others that arise during the acquisition process. If you are buying a business you need to know about these issues early and not when you are trying to negotiate a deal.

We have the expertise and experience in carrying out business valuations for acquisition purposes.

Business Valuations When Buying A Business

Warren Buffet has said: "Price is what you pay - value is what you get"

When you buy a business you want to make sure you don't pay any more than what is required to acquire the business given the risks involved.

But how do you work out the value of the business and more importantly how do you work out what to pay?

There are two different issues here:

The value of the business is a question of business valuation. Do you want to know the market value, the value to the owner or the strategic value to you as a buyer?
The price of the business is based on your ability to negotiate and confidently convince the seller that your suggested price is the offer they should accept.

This gives you the information you need to negotiate the price with confidence, along with an independent assessment of the risks and issues that will impact the value of the business. You may have a business valuation report that indicates a particular market value range but that is not necessarily the price you offer. You offer price may be adjusted by factors personal to your circumstance.

A business valuation completed before you make the offer gives you more options to buy the business for the best price.

What Do Business Valuations Provide When Buying A Business?

The likely market value price range for the business.
Features and issues that may reduce the price.
The highest price you can offer and still add value to your business?
The features of the business that make it a good acquisition.

Business valuations when buying a business provide:

Confidence to negotiate.
Reasoned arguments against claims a seller may raise during negotiations.
Ability to justify the reasons for a reduced price range.
Clear valuation improvement strategies.

Top 11 Things To Consider When Buying A Business?

When you buy a business you are taking a risk that the business you want to buy will deliver more benefits than what it costs. You will want a steady wage, a sustainable lifestyle, personal satisfaction and a return on investment.

Our Top 11 issues or questions you need to make sure you can answer before you buy the business are:

Are you confident that you can manage or operate the business you are buying? Will you get a trial management period before you are locked in?
What will your lifestyle look like in 1, 2 and 5 years times? Will you have the personal freedom you want? Will the business take over your life and is that okay?
What is the objective in buying the business? Do you want a wage and extra cash or are you buying the business to build and sell?
What is your timeline in owning and running the business?
Have you done enough due diligence before buying the business so that you understand and are comfortable with the business risk you are taking on?
Have you got legal advice about what you are buying, the sale contract and the possible legal risks?
Have you cross-checked what the vendor has told you or provided?
Will you be able to secure or gain any appropriate licenses, certificates or comply with required regulations?
Have you obtained accounting or financial advice on the performance of the business and the potential financial impacts of buying the business?
Can you start a new business for less than the sale price being asked?
Have you got a business valuation to check the price?

If you want to discuss the business you want to buy and what it is worth then send us a request to chat.

We are always happy to discuss the business valuations issues and trends from your industry and in particular the business you want to buy.

Our Business Valuation Consulting Experience By Industry

Our business valuation consulting experience has included almost every industry and business within the SME sector. It has spanned traditional sectors such as manufacturing, transport, retail, cafe and food related businesses to the latest technology development, IT and professional services firms.

We have made a more detailed list of our business valuation consulting experience by industry.