Establishing the estimated market value of a privately held company or family business is a sophisticated, nuanced process requiring significant knowledge & experience. Business value is built on four pillars: Market Demand, Profitability, Potential, & Infrastructure. Market Demand’s influence on value is calibrated by industry, geography, economic conditions, & financing availability. The role of profitability is straight forward. The more profitable a company the higher the value and the larger the dial for turning up Market Demand. Profitability that is sustainable or growing is the most attractive in the business opportunity marketplace. No one purchases a company desiring to exactly replicate what it did yesterday. All business buyers acquire companies seeking to see how it will perform under their ownership. The larger the opportunity for growth and enhanced efficiency the more potential a business has and the higher the value. Infrastructure value can be found in a spectrum of assets ranging from employees to physical & online locations to intellectual property and from customers to equipment to suppliers and inventory.
Only a mergers & acquisitions intermediary firm has the knowledge to incorporate present market demand into a valuation process. Business appraisers & CPA’s use the data generated by business brokers for their market comparables and lack the comprehensive knowledge of the dealmakers learned from working in the field facilitating transactions.
IBA offers complimentary opinions of business market value to potential customers interested in selling their companies. The service is free as a method of providing entrepreneurs an opportunity to assess our knowledge, experience, and customer service without contractual obligation. All information shared with IBA is held in strict confidence. IBA traditionally sells businesses within 10% of our suggested market value. IBA has the ability to justify our values to buyers, accountants, banks, investors, and lawyers. The true value of a business is what a willing buyer & seller will agree in an arm’s length transaction. The value of having a highly skilled, knowledgeable, & experienced intermediary convey the value proposition should not be underestimated. IBA has consistently achieved timely sales of privately held companies and family businesses in Washington, Oregon, Alaska, and Idaho for strong market values since 1975 out of our physical offices in Bellevue, Spokane, & Portland.
Additional information on IBA can be found at www.ibainc.com. Joseph Hollcraft, an ORLA Allied Partner and this blog’s author, can be reached at 503-739-4880; or Gregory Kovsky, IBA’s President & CEO, can be reached at (425) 454-3052, Joseph@ibainc.com, firstname.lastname@example.org, or www.ibainc.com/2023.