Business Appraisal Services in Las Vegas
The need for business appraisal in Las Vegas is on the rise, and as such, illegal service providers are popping up. Luckily, the number of legal appraisal companies outweighs the illegitimate ones.
Wiley Financial is one of the most trusted appraisers in Las Vegas, with more than two decades of experience. With a competent team, dedication, and strong company culture, we have helped hundreds of businesses increase their value.
What is Business Appraisal?
Business appraisal is the process of estimating the value of a business or asset. Besides business appraisal, assets such as equipment, real estate, rare goods, and inventory can undergo a business appraisal.
A certified appraiser carries out a business appraisal. These experts undergo thorough training, and it is through their skills and experience that they can estimate the fair value of an asset or business.
Why Business Appraisal in Las Vegas?
There are many reasons why businesses need appraisal services. While diverse, the common ground is that one of the parties needs a fair estimation of a business value. Some of the reasons include:
To Secure Funding
Whether you are looking for a loan or investors for funding, both will require the value of your business. The appraisal report shows the fair value estimate of your business, enabling the bank to calculate your credit score. On the other hand, an investor will seek to see if their investment will be profitable or
For Will Planning
It is the most subjective valuation method. While using this method, you can get the value of your business based on the similar enterprises sold in the industry. However, this method is only applicable to companies with enough market information from other peers. The market value approach is a challenging method when valuing sole proprietorship businesses. Individuals own sole proprietorship businesses and it isn’t easy to find valuation data from them. Since the market value approach is somehow imprecise, you will be forced to opt for negotiation, especially when looking for an investor. Nevertheless, the market value method provides an idea of the worth of a business before bringing in an accurate method.
Asset-Based
Your family, advisors, and lawyers may want to know the fair value estimate if you have a vast company. It ensures an equitable division of assets to your beneficiaries.
To Facilitate a Transaction
When selling or buying a business in Las Vegas, you want to know its value before committing. A business appraisal report enables you to negotiate, ensuring both parties get a fair deal.
To Settle Disputes
Disputes can emerge from within the company or due to external factors. For example, disagreements between shareholders can lead to the need for a business buyout. An independent appraiser can conduct a business valuation to facilitate a smooth buyout.
Divorce can also trigger the need for an appraisal, enabling a court to divide assets equally between the couple.
To Settle Tax Issues
Often, a business may donate an asset to a non-profit organization. In that scenario, the authorities tax the donor. For example, the Qualified Appraisal is an Internal Revenue Service (IRS) requirement when donating.
Getting a Business Insurance
Like any other asset, an insurance company cannot assign a policy without knowing the value of your business. Business appraisal shows the fair value; hence an insurance company will see the replacement value for your business or asset.
Business Appraisal Methods
So, which methods does Wiley Financial use for business appraisal in Las Vegas?
Asset Method
As the name suggests, the asset method examines an asset of a business and gives an estimated value. It means that the value of the business is its total assets. It is an ideal method for businesses under liquidation. It is also familiar with holding companies and asset-intensive businesses.
While most of its assets will be tangible, this method also considers intangible assets such as brand recognition, trademarks, copyrights, and goodwill. It sums up all the assets, giving an estimated value of a business.
Some of the approaches used in this method include:
- Going Concern
First, the appraiser will list the value of the assets of the business, which is the net value of impairment, and others. Next, they’ll list all the external liabilities of the company and reduce them to match the asset value.
This approach is popular with companies that do not want to liquidate or wind down. As such, appraisers will use annual reports to develop fair business value.
- Liquidation Value
This approach assumes the business will be liquidated or sold. Thus, it will calculate its current cash value, which is the cash it would receive, should it sell its assets. A company that uses this approach will have a lower value than the going concern approach.
Income Method
This method focuses on the income a business generates in its day-to-day operations. As you’d expect, the process relies on financial and accounting data. The appraiser will then analyze all sources of income and expenses thoroughly.
It will also consider future incomes and expenses. Therefore, the methods suggest that current and future incomes are the business’s fair value.
Market Comparison
As the name suggests, appraisal of a business depends on comparison with other similar companies. It is especially popular with real estate appraisals because data on such assets are publicly available.
This method assumes the business is ready for sale. To get the fair value, the appraiser will compare this business with a similar one sold recently.
Goodwill Value
Often, appraisers in Las Vegas will use objective data and tangible assets to create a fair business value. However, the value of the business must also consider intangible assets, such as goodwill, as it is a crucial intangible asset.
The business’s overall reputation is evaluated here, including the owner, products sold, and services rendered. As you’d expect, a firm with positive goodwill will have a higher value and vice versa.
How to Get a Business Appraised in Las Vegas
Search for a Reputable Appraiser
Find an appraiser in your area. Wiley Financial serves customers in Las Vegas. The appraiser should be registered and accredited. Avoid using uncertified appraisers since the IRS will require an appraiser report from a registered company.
An excellent place to start is visiting the American Society of Appraisers website. Here, you’ll find many appraisers from Las Vegas. Alternatively, you can conduct a simple Google search, including the name of your town.
Contact the Appraiser
Once you identify the appraiser that suits your needs, you can email or call them. Discuss with them the nature of your business. Mention the tangible and intangible assets as well as liabilities. Note that not all appraisers are qualified to appraise all types of companies.
If this is the case, request a referral. At Wiley financial, we offer appraisal services to various businesses in different industries. However, we focus on companies with less than $10 million in annual revenue.
If the appraiser meets your needs, they will give you a quote. Most companies will require a down payment before proceeding with the next step.
Schedule a Meeting
Once you pay the down payment or meet the company’s requirements, you will schedule a valuation date with the business appraisal company. On that day, the appraiser will physically visit your business to assess your assets .
Depending on the industry and size of the business, it can take anywhere from a few days to several months. We recommend a business owner be flexible since the process might need adjustments in the future.
Benefits of Business Appraisal
So why should you consider consulting an appraiser? Let’s find out.
It Helps You Know Business Assets
You will understand the actual value of your business’s assets. Unfortunately, most business owners overlook this aspect, selling their businesses at a loss.
However, with an appraisal report, you can tell the fair value of your business, enabling you to get the right bargain. Besides, it shows you where you need to invest more to increase its value.
It Gives You a Resale Value
Unfortunately, most business owners sell their businesses in case of an unprecedented incident. Often, they’ll sell the business at a loss.
Understanding the value of your business ten years before selling it can enable you to increase its value with time. And this is what getting a business appraisal in Las Vegas from Wiley Financial lets you do.
