Business Valuation and Appraisal FAQs
1. Your firm looks highly qualified. Does that mean you’re expensive?
No! Our rates are often considerably lower than what our competitors charge. We’re also happy to tailor our scope of work to your particular needs.
2. I see that Arrowfish serves clients nationally, but I don’t see that you have an office in my state. Can you effectively provide business valuation services for an out of state client?
Absolutely! The Internet, overnight mail and major airports near each of our main offices enable us to work with litigation and business valuation clients anywhere. You want to choose your business valuation expert by their experience and hourly rates, not their location.
3. How do you determine the value of my business or business interest?
No doubt every engagement is unique in its own right, but the fundamentals of business valuation remain the same. In order to determine the value of your business, we rely upon industry standard business valuation methods that include one or all of the following three approaches: Asset Approach, Income Approach based upon discounted cash flows or capitalized earnings, or a Market Approach based upon a comparable transaction analysis.
Often, the business value determined using these approaches must be adjusted to reflect specific aspects of an engagement. For example, business valuation can change depending on whether:
- The company is being sold in an asset versus a stock transaction
- The transaction involves a fractional or minority interest in the business
- There are material restrictions on liquidity
- There is real estate included
- Debt is being assumed
- The business experiences high volatility or has other unique risks
- A single person (often the seller) is vital to the company’s prospects going forward
We apply these adjustments as appropriate to generate a real-world assessment, resulting in a discount or a premium to be added to the company’s raw value.
4. Do you have business valuation experience in my industry?
Our seasoned experts have experience in a wide range of industries. If you don’t see your industry on this list here, don’t worry. Because we rely upon standard, conventional business valuation methods, our approach to determining your company’s value is not limited to any particular industry.
5. Do your appraisers and reports meet the definitions of “Qualified Appraisers” and “Qualified Appraisals” for IRS valuation reporting requirements?
Yes! We are regularly retained for IRS reporting purposes so we are very familiar with the applicable IRS requirements regarding qualified appraisals and qualified appraisers.
6. What types of entities do you provide business valuation and appraisal services for?
Our business valuation experts are trained and experienced in the valuation of all types of entities, including Family Limited Partnerships, LLCs, S-Corps and C-Corps.
Our business valuation experience includes determining the value of everything from a controlling or minority interest in a closely held business to entire public companies, and from professional practices, manufacturing companies and franchises to securities and real estate holding or development companies.
7. What if I don’t require a full business valuation report, but only need some informal guidance?
No problem! We can be flexible to tailor our business valuation services to match your particular needs.
8. What information do you need in order to provide business valuation services?
The reality is that every engagement is different and will require different information, but generally we are going to ask for items such as financial statements, tax returns, operating agreements, articles of incorporation, information related to prior sales of interests in the business, etc. Give us a call so we can discuss your particular situation.
9. Do I need an appraisal or a business valuation?
Depending on the context and the audience, these words can be used interchangeably or carry distinct meanings. Give us a call to discuss your situation and we’ll make sure you receive the appropriate services.
10. Can you assist me with the business valuation of a small or privately held business?
Yes! The truth is that our business valuation experts provide valuation and appraisal services for companies of all sizes – including the proverbial “small business valuation”. Just as important, we don’t treat you differently just because you have a “small business.”
11. Do you perform real property or machinery appraisals?
We do not perform valuations or appraisals of real property or machinery, but are happy to refer you to trusted appraisal firms that do.
Contact us today for a free initial consultation.