Business Valuation
Understanding the value of your business is the first step toward a successful exit. Our valuation process analyzes financial performance, industry dynamics, and buyer demand to determine how your business will be positioned in today’s market.
Comprehensive Business Valuation Analysis
Provide a few details about your business and our team will begin analyzing your financials, industry dynamics, and current market conditions to prepare a preliminary valuation.
Once complete, we’ll review the analysis with you in detail-aligning on your goals, walking through current market conditions, defining what’s achievable, steps to maximize value, and how to get there.
We work closely with you and your accountant to optimize your financials and ensure every lever is pulled – so your business goes to market in the strongest possible position to command a premium valuation.
Valuation Methodologies
Our valuation approach incorporates multiple methodologies utilized across SMB and institutional M&A, including precedent transactions, cash flow analysis, and market comparables.
We also analyze the business through the lens of private equity, strategic acquirers, and distressed investors – ensuring a comprehensive and defensible view of value aligned with how different buyers will underwrite the transaction.
Precedent Transactions
Precedent Transaction Analysis evaluates what comparable businesses have sold for in recent M&A transactions. By focusing on actual deal activity within a relevant time period, we gain insight into how buyers are pricing similar companies in the current market.
We analyze the valuation multiples paid in these transactions – such as EBITDA or revenue multiples – and apply those benchmarks to your business. This ensures your valuation is grounded in real market outcomes and reflects what buyers have recently been willing to pay.
Discounted Cash Flow
The Discounted Cash Flow (DCF) method estimates value based on the future cash flow a business is expected to generate. This approach relies on a set of assumptions around growth, margins, and long-term performance to forecast how the business will perform over time.
Those projected cash flows – along with a terminal value representing the business beyond the forecast period – are discounted back to present value. The result is a view of what the business is worth today based on its expected ability to generate cash in the future.
Market Comparables
Market Comparables analysis benchmarks your business against similar companies that are publicly traded. By analyzing key financial metrics such as revenue, EBITDA, growth rates, and margins, we establish how the broader market values businesses with similar characteristics.
We then evaluate the trading multiples of these companies and apply those benchmarks to your business, providing additional context around valuation. This approach helps anchor value in current market conditions and reflects how investors are pricing comparable businesses in real time.
Leveraged Buy-Out (LBO)
This approach evaluates the acquisition from the perspective of a financial buyer, focusing on how private equity firms and individuals – often using SBA financing – underwrite returns. By analyzing cash flow, debt capacity, and capital structure, we determine what a buyer can realistically afford to pay while achieving their target return.
This framework ties valuation directly to deal economics, ensuring the business is priced in a way that aligns with how buyers structure and finance acquisitions. It provides a practical view of value based on what an investor can actually pay – not just theoretical multiples.
Sum-of-the-Parts (SOTP)
For businesses with multiple revenue streams or distinct operating segments, we evaluate each component of the business independently. This allows us to identify differences in growth, profitability, and risk across each segment rather than applying a single blended multiple to the entire company.
By valuing each segment on its own merits and aggregating the results, we ensure no value is overlooked. This approach is particularly useful when certain parts of the business may command higher multiples or attract different types of buyers.
Liquidation Value
Liquidation Value Analysis estimates the value of a business based on the net proceeds that could be realized if its assets were sold individually. This approach considers tangible assets such as equipment, inventory, and real estate, typically at discounted values to reflect an orderly or forced sale.
While not a primary valuation method for operating businesses, it serves as a baseline to understand downside protection and capital recovery. This provides additional context around value by establishing a floor beneath other valuation approaches.