Valuations

What is my business worth?

There is no shortcut to determining the value of your business, nor does a single approach or formula address this complex matter. To be certain, however, should you depend on your balance sheet to value your equity, you do yourself a great injustice.

Past earnings multiples, a valuation based on historic cash flow and fair market value, as compared to a valuation based on future earnings potential, will offer a difference of opinion with respect to worth.

Benchmarking a recent study on the different valuation methods for the same company, these valuation methods were compared and the variance between them was staggering.

According to Business Week magazine, “seven offers ranged from 1.5 to 7.6 times cash flow, and the spread between financial valuation and market evaluation is very pronounced.”

Accepting an inaccurate or incomplete valuation can be very costly for sellers, and very rewarding for buyers. Once you sell your business, you might find that the interest on your after tax principal will provide a greater income to you than the sum of current annual salaries, bonuses, and perks. By carefully evaluating and exercising the available options you can realize an increased net worth.

Improve your liquidity and worth—do you have an established plan?

Like many business owners, countless hours are spent making sacrifices to ensure the company has the success it enjoys today. Have you taken the time to assess what your business is actually worth?

We recognize just how hard you worked to build your company. We challenge our clients to understand the real worth of their company—and not accept less than this worth. Many business owners make the costly mistake of looking to their balance sheet to calculate their net equity. Most owners never receive what their business is really worth.

At AIM Capital Corp., we are here to help. We can guide you through the process of more accurately determining the value of your business, while also showing you how to convert your investment into liquid net worth. If a business valuation is deemed appropriate we will assist you in selecting a highly qualified and independent valuator. If property or equipment appraisals are required, we will help you select a suitable firm that is appropriately experienced in your area of industry.

There is a substantial difference between a financial value calculated from past earnings and full market value. Our confidential review will help you to understand the difference and design a program targeted to realize the true worth of your business. During this review, we assess:

• How best to determine full market value and to portray that the majority of the valuation is a premium based on a mature and future earnings stream.
• How timing may make a large difference in your selling price, for example, if you sell when the buyers are paying historic highs.
• How best to identify and qualify profitable buyers for your business, ones more motivated and able than your competitors, employees and other obvious purchasers.
• How to profit from the fact most public companies grow through acquisitions, and they often pay higher prices than less qualified private buyers.
• How to determine the difference between a strategic buyer and an economic buyer and which might be best for your company and your goals.
• Whether holding a sale to a fixed timetable, or when you are simply ready, can deny you your just reward and years of financial freedom.
• Whether to sell immediately or at a later date, and if so how best to approach the matter.