Business Valuation Report
What do your business valuation reports contain?
Flexicom’s business valuation services include the production of a valuation report as well as an extended analysis report. That means you receive advice concerning weaknesses in your business, and suggestions on how to improve them, without making these public to anyone looking for an independent valuation of your business.
NOTE: actual contents will vary based on the service level purchased as well as the size and type of business being valued.
An investor friendly business profile and valuation taking the most positive assessment based on justifiable assumptions and forecasts. It includes sections on:
A concise summary of the business activities and investment potential. This section concentrates on what makes the business attractive to a buyer/investor rather than a customer looking to purchase its products or services.
Capital Structure and Ownership
Examines how the business finances its overall operations and growth, including use of short and long-term instruments. The ownership and control of the company is also checked with particular regard to any shareholders/partners agreements or side letters beyond the registered annual report.
Management & Key Staff
The organisation structure is assessed for key staff (including the current owner) and critical knowledge that is essential to the business. Is the company at risk of anyone being hit by the proverbial bus, are key customers tied to the company, and are staff motivated and likely to be retained?
Summary of financial performance including the most recent profit & loss and balance sheet reports as well as an explanation of any exceptional items and a review of the business’s historic trading figures.
Most importantly, the financial forecast is included here with a justification of any significant expected change in performance.
Products & Services
An outline of the business’ offerings, with a particular focus on its product differentiation. Why do customers buy your products and services? Will they continue to do so? How does the business go about marketing and benefiting from this feature?
A summary of the company’s intangible assets, for example brand, know how (processes & business methodologies) and intellectual property rights. These can have a significant impact on a valuation as they highlight that the company is not just its balance sheet.
The valuation report concludes with the assessed value of the business, with a description of the method used and any assumptions made.
A more in depth report including alternative valuations, competitor analysis, market analysis and suggestions on how the business could be tweaked to improve its valuation. As well as the content of the valuation report the analysis report may also include the following:
An independent assessment of the business’ competitor’s strengths and weaknesses such as product range and pricing, as well as possible threats and opportunities.
A look at the industry specific factors affecting the business, for example market size and trends plus political, technological and environmental changes. The market analysis helps inform business planning activities such as inventory, recruitment and capital expenditure.
Alternative Valuation Methods
In addition to the valuation method used in the valuation report, the analysis report may include alternative methods for comparison, e.g. multiple values, net assets, comparable businesses. This helps in preparation for any negotiation where the other party may have used one of the alternative methods.
Flexicom is not suggesting it can come up with a magic formula to improve your business as part of its valuation service, however where possible it will highlight where improvements to the presentation of the business may have a beneficial impact on its valuation.
To download a sample contents page of the different reports, please click on one of the links below.
Request a valuation of your own business - see a full comparison of our business valuation services.