Business Valuation Services in Las Vegas
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To conduct business valuation in Las Vegas, you must consult a certified valuation company. Wiley Financial is such a company accredited by relevant bodies. It continues to offer valuation services to many Las Vegas businesses.
Valuation helps you determine the fair value of your business so that you can sell it at a profit. With decades of experience, Wiley Financial considers all of your assets, so you know the position of your business in the industry.
What is Business Valuation?
It is the process an evaluator determines the economic value of a business or company. Business valuation is crucial, especially if you want to sell, buy, or merge with another business. It is also helpful in case of legal issues such as divorce.
As such, businesses turn to an expert to determine the fair value of their companies. One such company that offers these services is Wiley Financial.
As you’d expect, business valuers use several approaches when conducting a
Business Valuation Approaches
Asset-Based Approach
This approach focuses on the net asset value of a business. It is the difference between total assets and liabilities. Liabilities are debts a company owes a third-party creditor, such as bank debts, notes, and accounts payable.
Assets, however, are valuable things that a company owns—for example, stocks, cash, and buildings. However, a company can decide which assets and liabilities will be used.
This approach can be used together with enterprise and equity values for a more precise valuation. It uses two methods: asset accumulation valuation and excess earnings valuation.
Asset Accumulation Valuation
This business valuation in Las Vegas is similar to the balance sheet. As explained, it takes the total liabilities and subtracts them from total assets.
As simple as it may sound, using the wrong liabilities and assets can ruin the fair value of your company. Furthermore, assigning value to your assets and liabilities should be done carefully.
Excess Earnings Valuation
This approach combines assets and income valuation methods. Businesses in Las Vegas also use it to calculate their goodwill. In addition, it is helpful for service providers such as architectural companies, law, and accounting firms.
Income-Based Approach
This approach uses the income a business generates to estimate its value. It uses past, present, and future cash flows to create an elaborate value. Appraisers in Las Vegas will use capitalization to evaluate the income flows.
It is through capitalization that the present value is realized. After this, risk, a business not producing the estimated returns, is added to the process through discounting. These are the main income-based methods.
Capitalization
Cash flow capitalization calculates a business value by dividing its historical cash flow by its capitalization rate. It shows a business’s expected growth in the future and the level of risk. It assumes the company will perform modestly.
Discounting
This method involves using future cash flow predictions and then discounting them back to the valuation date. While it shows a potential buyer’s potential cash flow for the future, it is susceptible to high risk since the future is not certain.
Market-based approach
This approach places a business valuation depending on the selling price of a similar business. For example, suppose you are selling a bakery in Las Vegas. In that case, an evaluator will look for another bakery sold in the same area and then use that price to make adjustments.
For example, they might look at the location and age of your bakery before giving a fair value. It is primarily an ideal method for evaluating the value of real estate since data is often publicly available. However, it can be daunting to use the approach on alternative investments.
Some of the methods used include:
Public company comparable
This method uses data of companies that are traded publicly for business valuation in Las Vegas. While it is hard to compare most Las Vegas businesses with those publicly traded, business valuation companies leave room for flexibility to find at least a few companies that are similar to your business.
At Wiley Financial, we have significant experience selecting, adjusting, and applying public companies’ valuation data. As such, we ensure you get the correct valuation.
Precedent transactions
This method uses pricing multiples of transactions of companies similar to yours to come up with a valuation. It is because assessing the financial data of companies is not easy.
As such, the valuation of a business is done based on transaction value.
The method also allows the valuation of businesses in Las Vegas using historical data since valuation databases are publicly available.
Wiley Financial uses guideline companies similar to yours to avoid false valuations.
What are the benefits of a business valuation?
Enables you to access investors
When a business wants to seek more funding, most investors will require a business valuation report. As mentioned, it shows the economic value of the company. In addition, it enables the investors to gauge whether the investment will be worth the salt.
Besides, determining the value of your business enables you to reach out to the right investors. In addition, it shows you where the value of your company lies. You can use that as a bargaining chip to persuade the investors.
Better decision making
Business valuation also highlights the areas where returns are high and are taking a dip. Having this knowledge allows you to invest in the right places, significantly bolstering the value of your business.
Enables you to know the resale value
Let’s face it, running a business involves lots of monetary investment. Whether running for decades or a few years, one has to pour many hours into it. And since selling it is a once-in-a-lifetime event, you ought to sell it at the right price.
And this is what business valuation helps you to do. Since it starts before the business is on the market, you can know which areas to improve to increase its selling price.
You understand the business position in the industry.
What to consider when selecting a business valuation company
Cost
As you’d expect, the business valuation cost differs between companies. Factors such as the size of a business, industry, and others affect pricing. On the other hand, a business valuation company with decades of experience will charge higher.
And since most will charge an hourly or flat rate, the business owner must keep this in mind before committing. At Wiley Financial, we provide an estimate before starting the process. It enables you to make a wise decision before committing.
Experience
Business valuation companies with decades of experience will undoubtedly afford troves of best practices during the process. Moreover, they know what suits your needs since they have conducted business valuation in different industries.
Another benefit of working with an experienced company is access to resources, tools, databases, and more, which makes the process transparent and easy to understand. Wiley Financial has over 20 years of experience working with companies in different industries.
Accreditation
Accreditations, although not an indication of performance, portray professionalism. All business valuation companies in Las Vegas require certification to ensure they give services that align with industry standards.
Working with certified valuation companies is also a requirement by shareholders and investors. In addition, courts and the IRS require businesses to have their valuation done by legal and accredited valuation companies.
Wiley Financial is accredited and recognized by relevant industry agencies, and we offer many clients business valuation services in Las Vegas. Contact us to learn more about getting started.
