San Antonio Business Valuation
Use Our Business Valuation Calculator to
There are many San Antonio business valuation companies, among them Wiley Financial. We offer valuation services across different industries, a favorite for many businesses and individuals. We strive to meet your business valuation needs regardless of the business type.
What is a Business Valuation?
Business valuation is the process of determining a firm’s value. Scenarios such as taxation, sale value, and disputes use business valuation. To ensure an accurate valuation of a company, business owners will often turn to independent valuers.
Wiley Financial deals with startup, restaurant, and private company’s valuation. There are several methods for business valuation, such as book value, market cap, and others. What to use depends on the company’s nature and the business valuator.
Business valuation involves analyses such as future earnings, business management, assets’ market value, and others.
Business Valuation Approaches
So, which approaches does Wiley Financial use? Let’s find out.
Asset Approach
The approach is also referred to as the replacement or cost approach. It assumes that all assets’ value minus liabilities equals the company’s value. It uses methods such as:
Adjust net asset method: The most common method subtracts the total value of liabilities from that of assets. The value of the business is, therefore, the amount it would fetch if it sold all assets and cleared its liabilities.
Excess earnings capitalization: The method utilizes income- and asset-based approaches. Here, excess earnings, tangible and intangible assets total, are valued as a single entity.
Income Approach
It is the most popular method among most San Antonio business valuation companies. It uses techniques such as discounted cash flow (DCF) and capitalization of cash flow (CCF).
The DCF method takes several future benefits streams and converts them into value. It uses a return rate equal to the benefits’ risk to discount the earnings.
The CCF method is standard in companies that project stable future cash flows. The single-period valuation method divides the capitalization rate with a company’s cash flow.
Market Approach
It is the most appealing method of the three, where a valuator compares the value of the subject firm with a familiar one, providing the company’s value. It uses methods such as guideline transactions and prior transactions.
Business Valuation Methods
Time Revenue
The method uses revenue streams within a specific time, which are then used with a multiplier. The multiplier depends on the nature of the economy and the industry. For example, valuing a tech company is different from a health company
Market Capitalization
This method is more reliable than time revenue since it uses a company’s profit information. As you’d expect, profits indicate a company’s financial success more accurately than sales revenue. It adjusts a company’s current P/E ratio to accommodate interest rates in the same period.
Book Value
Like the earnings multiplier, it uses a company’s future cash flows. It adjusts them to get the current value of the subject firm. It also includes inflation to get the accurate value of a company.
Liquidation Value
Liquidation value is the cash a business would receive should liquidation occur and payment of liabilities done today. While not an exhaustive list, these are the standard methods. Others include asset-based, replacement value, and breakup value.
Discounted Cash Flow
It is the equity of a business’s shareholders on the balance sheet. A valuer will subtract the total liabilities from total assets.
Benefits of Business Valuation
How does conducting business valuation in San Antonio benefit you?
Access to Investment
Armed with the value of your firm, you can confidently approach prospective investors. Besides, investors must know an investment option’s value before committing. A business valuation report shows the potential growth of your company, allowing them to gauge if it will be a profitable investment.
Knowing the Industry Position of your Company
Another advantage of business valuation is you can precisely tell where the company fits in the industry. You can identify your competitors, allowing you to set strategic growth plans.
You can Determine the Firm’s Accurate Value
Generally, business owners in San Antonio will have a rough idea of how much their business is worth. It can be through asset value, bank account balances, and others. Unfortunately, this will not give them the fair value of their business.
A business valuation will use different factors and data points to determine the actual value. As such, the owner can decide whether to sell the company or increase its value, then sell later.
Determines the Resale Value of a Company
Regular business valuation lets a business owner know the business value at different times. It enables them to identify investment areas to increase the company’s value.
We recommend conducting business valuation even in your business’s formative years. The strategy enables you to develop short- and long-term growth strategies. As such, you can have an informed exit strategy.
What is a Business Valuation Calculator?
This calculator helps buyers and sellers to estimate a company’s value. It uses annual profits or sales in its formula, multiplied by a multiple, depending on the company’s industry.
Wiley Financial provides you with a calculator with inputs such as:
- Annual earnings
- Excess compensation
- Projected compensation growth
- Estimated years of continual earnings
- Business’s level of risk
- Discount for lack of marketability
The calculator will calculate the inputs to show you an estimated value of your company. However, consider consulting a valuator such as Wiley Financial to get an actual value.
What to Consider when Looking for a Valuator
Credentials
Legal business valuation companies in San Antonio require accreditation from authorities so you can receive professional services. Without credentials, shareholders or investors going through a business valuation report might question the estimated value.
Besides, the IRS and court proceedings require a credit valuator’s valuation report. An accredited valuator is also likely to stay abreast of advancements in the industry. They will provide you with current tools, resources, and techniques.
Experience
Valuers with longevity in the industry are more likely to offer stellar services. With a vast knowledge of industry best practices, they will ensure you get the accurate value of your business. If possible, consult a valuator who serves companies in different sectors.
Another benefit is access to resources and databases. It facilitates a smoother transparent process, enabling you to understand each valuation stage. Experienced valuators can also access relevant industry data, which can help you improve your company’s growth plans.
Wiley Financial has more than 20 years of experience helping small businesses determine their value. We also have access to multiple resources, databases, and industry data for optimal results. Call us, email us, or give us a call and book an appointment.
Cost
Valuators in San Antonio will charge differently depending on the size of the company and the valuation scope. The industry the subject firm is in and the valuation’s purpose will affect pricing. While some will charge a flat fee, others will charge an hourly rate.
Most San Antonio business valuation companies will provide an estimate before the process begins. As a rule of thumb, go for the valuator that fits your budget. At Wiley Financial, we strive to accommodate businesses with different budgets.
Frequency of Business Valuation
While there’s no one-fits-all answer, here are aspects that could influence business valuation frequency in San Antonio.
Cash Flow and Profitability
Your business’s profitability and cash flow indicate whether you can afford frequent valuations. It’s not ideal for firms with minimal cash flow. Periodic valuations will keep your company’s performance in check.
Exit Strategy
Do you plan to sell in five years? A business valuation will help you identify investing areas to increase a company’s value before the due date. The closer you are to a firm, the more valuations you need.
Ownership
A company with multiple owners will require a frequent valuation to avoid disputes and management disagreements. Valuation reports provide the owners with a business’s performance report. It means they can develop suggestions to improve the company’s profitability.
Nature of the Industry
Companies in stable industries such as water and utilities require minimal valuations compared to those in volatile sectors such as technology.
If you want services from a professional San Antonio business valuation company, contact Wiley Financial and book a consultation.
