Perhaps the most important step in our Comprehensive Selling Process is the determination of a realistic and probable selling price. Many a business has failed to sell due to unrealistic or unsupportable asking prices. Recognizing the importance of a proper valuation and realistic selling price, Procision expends significant resources to develop a well thought out and supportable Opinion of Value on behalf of our Clients. As such, we believe that it is pivotal to educate our Clients and agree upon the value range early in the process.
During the initial analysis and throughout the valuation exercise, Procision employs Valuation “Best Practices” to develop a customized Opinion of Value. From a practical standpoint, we are conducting a complete review of all aspects of the business, including its financial position, competitive landscape and the value proposition for potential buyers. Thereafter, we are able to develop the complete financial picture, identify key drivers of value and integrate this newly developed insight with the most up to date industry information and market intelligence. Procision conducts continuous market research and maintains a thorough understanding of the current market dynamics at play.
Our process begins with a thorough review of all financial records and a follow-up consultation to understand various revenue and expense factors that influence these numbers. Typically, three to five years of financial statements and tax returns will be required. At this point, our team will seek to acquire a deeper understanding of the financial history of the business and the potential adjustments that will be required to establish the economic benefits of the business. Based on results of our analysis, Procision performs a recast or normalization of the Financial Statements in preparation for the completion of valuation process. Multiple valuation methodologies are then utilized and the results of our computations are coalesced as we formulate a fair market value. The culmination of these efforts is the establishment of a projected selling range and most probable market value of the business.
However, our work is not complete. As we proceed through our Comprehensive Selling Process, we will regularly present, explain and support the value so that Buyer’s and Lender’s alike can feel comfortable with the value proposition and potential of the business going forward. We will continuously assess and reassess as needed and adjust based on the feedback of the market.
Remember – the market ultimately decides the value at which a business will sell!