Business valuation specialists
What is your business worth and why should you know?
Many business owners assume they will only need a valuation when they are selling their business. A valuation may also be required when seeking finance or insurance, for tax calculations, liquidations, or relationship breakdowns. Even when there’s nothing like that on the immediate horizon, a valuation will give you a starting point from which you can then make strategic decisions to add value.
Valuing a business is complex. There are many factors that affect the value (and marketability) of a business. One determinant of value is your current and recent profit history. However, profit is only a starting point. Less tangible factors such as customer relationships, business risk, intellectual property, the legal and regulatory environment and future potential of the business are also major considerations. Added to this, the exact process and factors assessed can differ depending on the particular market and industry sector.
Our valuation team has a thorough understanding of the components of value and the right blend of commercial experience, analysis and professional judgement to deliver a robust and fair assessment. At the end of the process, you’ll have a comprehensive understanding of your business’s key value areas and what to improve on for a better exit outcome.
Bridging the value gap
A value gap is the difference between what your business is worth today and what you need it be worth to achieve your personal, family and business life plans.
Knowing your value gap, and working on bridging it, is particularly important if you’re depending on your business to fund your retirement. When you know there’s a gap well in advance, you’ll have enough time to implement value creation strategies.
We have many clients that check the value of their business every year as part of their family wealth creation plan and to reduce their value gap risk. We use industry valuation benchmarks to pinpoint areas where you can improve your business value. With ‘what if’ and ‘revaluation’ analysis technology, our Business Improvement advisors can create a plan for you to get to (or exceed) your desired business value.
Read the client stories below to see how we’ve been able to help.
We recently completed a business valuation and value gap analysis for Sally, a business owner operating a chain of retail outlets. Sally is intending to sell her business in a few years and retire. She’d made a guesstimate of the business’s value but wasn’t sure if it was accurate. It turned out it wasn’t accurate and Sally had over-estimated the value. This is not an uncommon scenario; we find that many business owners have unrealistic sale price expectations for their business.
Once we had an accurate valuation, we were able to determine a value gap between what the business is currently worth and what Sally needed it to be worth at the time of sale to achieve her desired retirement lifestyle.
Armed with this information, we worked together to formulate a value growth plan for the business and put in place strategies which would add value while eliminating the elements that were taking value away (value leaks).
Buying a business can be stressful and for first time business owners it’s hard to know for sure if you’re paying the right amount for the business.
Mary was looking to purchase a retail and wholesale business but was concerned that the seller was asking too much for the business. Marsh & Partners worked with Mary to analyse the risks of the business and adjustments required to the financials. We developed an independent estimate of value for the business and this empowered Mary to further negotiate the price down.
Paul and Barry ran a manufacturing business together for over 15 years. Their relationship soured over the past few years and Paul wanted to buy Barry out.
As part of the process they had agreed to get an independent valuation of the business to determine the purchase price. We performed a risk assessment on the business with each owner independently and then got both together to come to agreement on the risks of the business. By using this process each owner had a voice in the valuation process, reducing any friction when the valuation was finalised.
Valuations for business in the Family Law court are very common but are also complex. Often parties feel ignored through the process and then attack the valuation as they don’t understand the value assessed.
After 10 years of marriage, Trish and Bill were getting divorced. During their marriage they had built up a successful retail business which Trish wanted to keep after the divorce. Marsh & Partners was appointed as the Single Expert to prepare the valuation for the business. We began by undertaking a risk assessment on the business with Trish and Bill independently and then got both together to come to agreement on the risks of the business. Once the valuation was finalised, Marsh & Partners appeared in court to explain the valuation to the judge and subsequently determine the value of the asset pool being divided.
Note: Names in client stories have been changed to protect their privacy.
Curious about the value of your business?
We'd love to discuss your business's health and help you build its value.
Find out some of the things we take into account in this short video:
The Business Valuation Process
We conduct a comprehensive review of the risk and value drivers that affect your business’s value.
We analyse your profitability, liquidity and cash position to uncover where the business performs well and any areas for improvement.
We look at how well each aspect of your business is performing in comparison to similar businesses in your industry to get a thorough understanding of your competitiveness.
We assess how your business is positioned in terms of growth opportunity and uncover any areas of weakness.
We deliver a valuation report designed to give you an in-depth understanding of the current value and possible future value of your business.
We provide solutions and tailored support to help you grow the value of your business. Whether your plan is to sell, grow, or prepare for succession; we help you manage the factors that result in better outcomes.