Business valuation tips, updates and advice. Pick up a few suggestions on how to value a business. Feel free to browse the contents or share your thoughts by leaving a comment.

Business valuation methods under the income approach feature prominently in professional business appraisals. These business valuation techniques work because you can determine your business value accurately based on two important factors: business earnings and risk. There are three key assumptions that help make your income-based business valuations highly relevant and accurate: Business people have alternative investment… Continue Reading


In the US alone, business owners and managers spend over $1 billion a year to determine the value of businesses and professional practices. So what prompts business people to conduct business valuation? Here are the most common reasons: Buying or selling a business Business acquisition is perhaps the best known reason to value a business. If… Continue Reading


A major component of the  ValuAdder business valuation software is the financial worksheets. What is the purpose of these? In short, to help you streamline your valuation projects. And to do so, we have focused on the key step in your business valuation: financial statement reconstruction. Key step – financial statement reconstruction or normalization In… Continue Reading


If you are in an industry where businesses sell often, chances are there is plenty of data to estimate your business value by comparison with similar businesses. A common way to do so is to use the so-called pricing multiples. These pricing multiples are ratios which relate some measure of business financial performance to its… Continue Reading


If you are valuing a company that is going through a period of rapid growth, the Discounted Cash Flow business valuation method should be high on your list of choices. Using this key income-based business valuation method, you can get very accurate results. This is because the discounted cash flow business valuation lets you capture the company’s… Continue Reading


If you expect that your business valuation results will be reviewed by tax authorities, you may need to prepare a business appraisal report that meets several key requirements. In the US, for example, the Internal Revenue Service has published the Revenue Ruling 59-60 in 1960. This central publication outlines a number of requirements that a business… Continue Reading


Ask any seasoned business appraiser and you will hear: there are three ways or approaches to measure the value of any business, large or small. True, but there are some big differences between a small privately owned business and a multi-national giant. To get an accurate small business valuation you need to keep a few key… Continue Reading


Retail industry is very large and its well-being is essential to the health of the overall economy. As an example, the retail market segment represented by the US department stores, SIC 5311 and NAICS 452111, has over 3,500 establishments generating just under 76.9 billion dollars in annual revenues and employing more than 534,000 people. Retail businesses… Continue Reading


You can measure the value of a manufacturing firm using a number of well-known methods. Importantly, all of these fall under the market, income and asset approaches to business valuation. However, to get accurate business valuation results you need to focus on two key points. 1. Identify and include all income-producing assets in your manufacturing company… Continue Reading


Food service is big business. In the US alone, over 570,000 eating and drinking establishments generate nearly $375 billion in annual revenues and employ some 6.8 million people. The industry landscape is increasingly dominated by regional or national chains which account for more than 70% of the market. Yet the average restaurant grosses $1,200,000 and… Continue Reading



Business people often disagree about business valuation results. Given the amount of money at stake, it is not surprising that the parties tend to view what a business is worth from different points of view. Consider these common situations: Business sale The business seller wants to maximize the selling price and looks to support a higher business value.… Continue Reading


Payback period is the time it takes to recover your original investment. If you are buying a small business, that’s your down payment money. You can use ValuAdder Deal Check tool to factor in your payback period. Here’s how: 1. Your purchase price and terms Enter the purchase price and terms you have in mind. Next, specify the compensation… Continue Reading


Does professional practice valuation differ from other business appraisals? Consider this: Professional practices come in many types: dental and medical practices, law and accounting firms, architecture and engineering consulting companies, individual and business professional consulting firms. While a professional practice may look like a service business, there are key differences to bear in mind that… Continue Reading


Why do you need income statement and balance sheet adjustments before valuing a company? Because the “cost-basis” accounting statements such as the company’s Income Statement and Balance Sheet require adjustments before you can use them in business valuation. Your goal here is to demonstrate the business earning power and economic value of its asset base.… Continue Reading