In order to know what your business is worth you need a business appraiser. A business appraiser specializes in evaluating tangible and intangible property in order to determine the value of that business. At Wiley Financial we specialize in providing small business appraisal services in San Diego, California. Although we are based in Carlsbad, CA our business appraisers service all of Southern California.
In order to know what your business is worth you need a business appraiser. A business appraiser specializes in evaluating tangible and intangible property in order to determine the value of that business. If you are a business owner or a prospective business buyer and need an unbiased and professional opinion of the business please contact us today to get an accurate business appraisal.
What is a Business Appraisal?
A business appraisal is the valuation of a business by an authorized person. To come up with an accurate valuation a business appraiser will perform a deep dive into what the business is worth.
Many details and considerations go into a certified business appraisal. Besides the analysis of the company’s details such as financials and assets, the CVA decides on a “valuation approach” to apply to the business being appraised.
A valuation approach is a general way of determining value using one or more specific valuation methods. Valuation methods fall within three broad approaches: asset, income, and market.
These valuation methods are part of the reason why certified appraisals are held in such high regard—non-certified business valuations often only use one valuation method in their approach. As these approaches all vary in detail, it’s up for debate as to which approach is the most “correct,” leading to challenges in deciding the appropriate value of a business.
The 3 Types of Business Valuations
1.The Asset-Based Approach
The asset-based approach totals up the assets and liabilities of a business to end up with the net asset value. The goal of this approach is to determine what it would cost to set up an identical business. In theory, this approach is very simple. However, it takes a true professional to be able to determine what to include and do it correctly.
2. The Market-Based Approach
The Market-based approach looks at the market as a whole and not solely at your business. The value of other businesses in San Diego could provide insight on your own. The goal is to see what your business would be worth by comparing it to other similar businesses in the same market. This approach considers the overall market conditions. Also, with this method of business valuation it is important to factor in what a buyer would currently pay. Buyers want to pay fair market value, not necessarily what the business is worth to you.
3. The Income or Earnings Approach
This approach to business valuation looks at what the business is bringing in. It factors in the present and the future. This approach does carry with it assumptions, adding risk. The goal of the valuator is to normalize the earnings when determining the value of the business and work from there.
Potential Reasons a Business Appraiser is Needed
There are certain times in a businesses life when a certified business appraisal is needed and an estimated business valuation is not sufficient. Listed below are some instances when certified business appraisal services are needed.
- Initial Public Offerings (IPO)
- Exit Planning
- Buying or Selling a Business
- Potential Mergers and Acquisitions
- Partner Separations
- Employee Stock Ownership Transitions
- Business Damages
- Financial Reporting
- IRS Matters
- Dispute Resolutions
- Other Legal Matters
- Gifts and Trusts Endowments
- Business owners who just want to know their company’s worth
You can find more information about our business appraisal services by learning about our business valuation services and our certified machinery and equipment appraisal services. If you are looking for a small business appraiser Wiley Financial is here for you!
If you need the help of business appraisers in San Diego or have questions around business appraisal services in San Diego, Wiley Financial would be happy to help! Please reach us by email at [email protected], by phone at 760-994-8874 or contact us here.