How do I facilitate an accurate business enterprise valuation?
A business enterprise valuation is like any other analysis in that the quality of the report depends on the quality of the information utilized.
AccuVal’s Corporate Services team has three suggestions for facilitating an accurate business enterprise valuation:
- Objectively assess the future prospects for the business enterprise. While hindsight is 20/20, the business’ past results are only relevant to the extent that they are reflective of the future. Any future projections provided to the business appraiser should reflect the most likely performance of the business. Additionally, a business appraiser will also conduct due diligence to test the reasonableness of any projections provided.
- Furnish the business appraiser with company-specific and industry information that will allow him or her to focus on the business’ value drivers. Through sharing the information you already know, you are providing the business appraiser with a great foundation on which to begin the valuation analysis.
- Finally, forget any preconceived estimates of value. During the appraisal process, the valuation expert will be gathering and reconciling volumes of information. Ultimately, the business appraiser’s report will synthesize this information. By keeping an open mind, you will be able to question any assumptions made in the valuation and fully understand the rationale behind the appraisal.