Professional Valuation Services

VR in San Francisco partners with third party professional appraisal firms that provide a full range of professional valuation services. Our partners and their appraisers belong to the most respected appraisal associations in the country and hold the highest industry designations, making them experts in their field. Professional credentials include designations from the American Society of Appraisers and National Association of Certified Valuation Analysts.

Consideration for a Valuation.

In today’s advantageous market, many business owners still leave substantial money on the table when they sell their companies – most often because they do not truly have a handle on their company’s value. For that reason, the valuation process is a true asset to the business owner and a thorough, professionally prepared valuation will assist them in:

• Helping identify the key value drivers, major strengths, and more importantly, the major weaknesses of a company allowing the owner to solve both obvious and hidden problems prior to the selling process. 
   
• Determining a reasonable selling price.  Many owners rely on general rules of thumb, casual advice from friends, or other similarly unreliable sources. Values determined by general multiples or rules of thumb may be too high or too low.  Unless the business owner goes through the valuation process, he or she just will not know. If the owner’s expectation of value is too high, it will prolong the selling process until a price concession is made.  If the price is too low, money is left on the table.

• Fully understanding the value of the business will assist during negotiation.  In this market, one can expect buyers to be sophisticated and experienced.  They will conduct a rigorous analysis of the company even if the seller has not.  They will look at those factors and value drivers that the owner and his advisors should consider in valuing the company, and they will use that information against the seller in negotiations if allowed.

A true test of accuracy and validity of any valuation is the price at which a company would willingly change hands in the marketplace. The valuation of a privately owned company is both science and art. Since no two companies are exactly alike even within the same industry, trade, or service, there is no one formula or method that is all-inclusive. Our professional appraisal firms use a comprehensive, multi-method approach that consider relevant factors that are unique to a particular company including: company history and longevity, future economic outlook, tangible asset value, intangible asset value and industry ratios.

Also considered are factors such as historical net cash flow, probability of continued profitability, risk competition, technology changes, ownership transition training, owner non-compete and consulting agreements, as well as working capital requirements. There are many reasons to value a company. Whether it is for an anticipated acquisition or divesture, a partnership buy-sell agreement, stockholder concerns, martial dissolution, or estate planning, a professional valuation makes a world of difference. Since there are many reasons to value a company, there are many different levels of valuation services. From a simple target value for selling your company to a complex IRS-rated valuation, VR M&A can handle the assignment internally or by working with independent third parties.

Risk impacts value! Risk is defined as: the degree of certainty or uncertainty as to realization of expected future returns. Risk takes many forms in mid-size business: size of company, depth of management, reliance on key personnel, company specific concerns, industry trends, and to a great extent available return on alternative investments (stock market, bonds, t-bills, etc.)

There are three broad approaches to valuation: Income, Market, and Assets. Within each approach there may be many different methods that must be considered. After careful consideration of the relevant factors, a reconciliation of the related approaches is performed to determine which approaches are most relevant to the purpose of the appraisal assignment.

VR is the only contact and interface our clients have when doing a third party appraisal – we do the information gathering, the interviews and the packaging without any extra costs to our clients.

Contact VR in SF for more details and we will send you a detailed overview.

Email: info@vrgoldengate.com