Business Valuation Services in Omaha
Use Our Business Valuation Calculator to
Business valuation in Omaha is essential for your financial analysis both in the short-term and the long term.
What is Business Valuation?
Business valuation is an approach to determining your business’ worth. When performing your valuation, a business appraiser uses different methods to determine your company’s financial status. Business analysts normally use the current fair market value of your assets and business management to project the future earnings of your business. These aspects provide useful information for your business as well as potential buyers and investors.
When performing a business valuation, ensure that you have all the necessary financial reports indicating your assets and liabilities. If you are negotiating a deal with a potential buyer or investor, a valuation will help you discover the actual worth of your business. In addition, business valuation is useful when planning for a business expansion, exit strategy, tax reporting, mergers and acquisitions. These aspects of business valuation apply to your business at different times of your company lifecycle. It helps you make informed choices for the growth of your business.
Factors to Consider When Valuing Your Business
Before conducting your business valuation in Omaha, several factors must be considered. These factors contribute to the successful valuation of your company. The following are important aspects for your valuation:
- Tangible assets: Some of the tangible assets include inventory, property and machinery.
- Intangible assets: Some intangible assets include patents, trademarks and brand recognitions. When conducting a business valuation, you should have a concrete idea of your intangible assets.
- Liabilities: Debts your business owes to various stakeholders are deducted from the valuation.
How to Calculate Your Business Value
The value of your business depends on various elements. These elements include your expected growth, management and the size of your business. When calculating the value of your business, there are several formulas that you can use. Some of the business valuation formulas include:
EBITDA and SDE
One of the three approaches to calculating business valuation is using EBITDA multiples. The three standard formulas for determining the business valuations are adjusted EBITDA, multiple sales, and discounted cash flow from the adjusted EBITDA. Multiples are normally determined by the business growth, size and the specific industry. However, these multiples change with time. The following is the formula for the calculation of a business multiple:
EV ÷ EBITDA = Enterprise Multiple
When calculating a business’ enterprise value, or EV, add the market capitalization, preferred shares, minority interest and debt. After adding these items, deduct the cash. Business multiples provide valuable information for buyers and investors. Low ratios indicate that a business or an enterprise is undervalued.
Performing a comparison with similar businesses within your industry provides you with accurate data for your valuation. The comps method is the best when conducting valuations of small businesses. When using the comps method, find similar companies that have recently received funding or those that have been sold. After getting the multiples from these businesses, apply them to your sales. If you want to get the multiples faster, consult business brokers in your area. However, you should consult professionals such as Wiley Financial if you are not used to how to use the comps.
How Investors Perform Business Valuation in Omaha
There are several mathematical methods of calculating your business valuations. However, these methods are dependent on the type and quality of your data. It would be best if you used pieces of data that are in agreement between your business and the potential investors. When trying to attract buyers or investors, you should create an appeal of how your business is worth. Regardless if an investor uses SDE, a different approach or even multiple approaches, employ their preferred method(s) to find your business’s value. Depending on the nature of your business, an investor may use market-based, asset-based, or income-based valuation methods. Consult Wiley Financial for expert advice on how to get the best deal with your investors.
If you are interested in a business valuation in Omaha, we would be happy to help! We have the experience and the know how to accurately value your business so that you can rest assured you are getting what you deserve. Contact us today to learn more about getting started.