When critical business decisions are needed, an accurate valuation is indispensable. At Murphy Business Sales Tampa, we provide expert business valuation services in Florida, delivering precise appraisals tailored to your venture’s unique demands. Whether you’re considering selling, buying, or expanding, understanding the true value of a business is the cornerstone of informed decision-making.
Why Business Valuation is Crucial
Business valuation isn’t just a number; it’s a comprehensive analysis reflecting the economic worth of a company. Here are several scenarios where valuation is crucial:
Selling or Buying: Determine the fair market value for seamless transactions.
Expansion: Gauge the financial health of your business for potential growth.
Strategic Planning: Make informed choices for future business endeavors.
Exit planning: Find out the optimal strategy and timing for selling
Choosing Business Valuation Services in Florida
Navigating the complexities of business valuation requires professionals with deep knowledge and experience.
Qualities of Expert Appraisers
Look for valuation experts who exhibit:
Credentials: Certified professionals with a robust track record.
Experience: Seasoned appraisers familiar with Florida’s market dynamics.
Precision: Attention to detail that guarantees comprehensive valuation reports.
Understanding Different Valuation Methods
Several methods are used in business valuation, each serving different purposes.
Common Valuation Methods
Asset-Based Approach: Calculates the total asset value of a company.
Income Approach: Focuses on future earning potential and cash flow.
Market Approach: Compares your business to similar ones on the market.
Each method provides insights from different angles, contributing to a well-rounded business valuation.
The Benefits of Professional Business Appraisal Services
Working with specialists in business valuation ensures you’re equipped with accurate information for any business venture.
Advantages of Professional Appraisals
Objective Analysis: An unbiased view that can stand up to scrutiny.
Customized Reports: Valuations that reflect your specific business model and industry.
Strategic Insight: Empower your business strategy with data-driven valuation insights.
Our Approach to Business Valuation
At Murphy Business Sales Tampa, our business valuation Florida services are designed to give you a clear picture of where your business stands.
Comprehensive Evaluation
Our team conducts thorough research and utilizes state-of-the-art tools to deliver an exhaustive valuation that includes:
Financial Analysis: In-depth review of financial statements and projections.
Market Positioning: Assessment of your business’s place within the industry.
Growth Potential: An outlook on future growth and profitability.
How Our Valuation Services Can Serve You
Whether selling your business or looking to attract investors, our business valuation services will provide the financial intelligence needed to move forward confidently.
Tailored to Various Business Needs
Our services cater to:
Entrepreneurs: Who needs to know the value of their startups?
Small Businesses: Seeking expansion or exploring new opportunities.
Corporations: Requiring valuation for mergers, acquisitions, or divestitures.
Connecting with Our Valuation Experts
Finding the right business appraisal services in Florida starts with a conversation. Our Murphy Business Sales Tampa team is ready to discuss your valuation needs and how we can support your business objectives.
Getting Started
Reach out to us to:
Discuss Your specific valuation requirements.
Plan: The most suitable approach to your business valuation.
Engage Our services for accurate and reliable results.
Your Partner for Accurate Business Valuation
In Florida’s dynamic market, an accurate business valuation is more than a figure—it’s a strategic asset. Murphy Business Sales Tampa stands ready to be your trusted partner, providing business valuation services that meet and exceed your expectations.
If you’re ready to explore your business’s true value with meticulous and expert appraisal services, visit Murphy Business Sales Tampa today and connect with our team. Together, we’ll ensure that your business decisions are grounded in solid, quantifiable data.
The buzz is that if you are a Baby Boomer and you want to sell your business in the next few years, then you are in the majority. You are not the only Baby Boomer and will possibly have your business compete against many more similar businesses in both model and industry. In order to be well-prepared, you will need a proper valuation. Establishing a baseline value of your business will help you overcome weak areas that keep you up at night. Why would a buyer want to buy your problems? Some savvy entrepreneurs will want your problems, but most will not.
Check out our short video on the different types of Valuations.
Roger Murphy, our CEO, explains the different types of valuations we provide.
From time to time, I am in the unfortunate position of telling some 50-year old business owner that they “just don’t have any goodwill”. “But we have been around forever, or our name is like a household word in the community, or we literally have thousands of customers” might be the seller’s response. I am constantly amazed at how little knowledge most business owners have of what their business is actually worth. They will follow their checking account, their investments, and the value of their house but won’t think anything of whether their business value is increasing from year to year. So, what then does this have to do with goodwill? To understand whether you have goodwill, you must first know the value of the business, in total. With that number at hand, it’s simple math. Business Value minus replacement value of the assets it takes to generate the given cash flow equals goodwill, or Intangible value (in other words a value you just can’t put your fingers on or touch). This intangible can also be called “blue sky” or “intellectual property”.
It really doesn’t matter who has been there the longest or whose name is the most recognized, the proof is always in the numbers. Many times, the business with the 50-year history or a recognized name “is” the one that will generate the biggest goodwill. Why? Because those businesses have found a way to beat the competition in a myriad of ways. Better systems in place, better marketing, more productive employees, trade secrets and the list can go on and on. You have goodwill…because…you have found a way to squeeze more profits out of every sales dollar, end of sentence.
We recently presented a wish list for a typical seller of a small business. Now, it’s the buyer’s turn.
Entrepreneurs – whether they are buyers or sellers – generally agree on several factors that make the business transfer process more seamless overall.
A buyer wants:
A solid business – Although that phrase may be somewhat subjective, buyers are searching for stable companies with a track record of success. The savvy buyer approaches the situation just as a lender would: requiring a history of financial data that is able to be verified. Filed tax returns are the preferred record for conducting due diligence. It is also important that a business be established. Most lenders require a minimum of three consecutive years of financial history and prefer that the company was under the same ownership (the current seller) for these three years.
Reasonable seller expectations – This comes into play at the first moment a buyer begins looking at a business for sale. Does the seller receive an adequate income from his company? Are his revenues increasing or, in this economy, at least staying consistent from year to year? Is his business priced appropriately? Will the seller consider offering some financing?
Disclosure during the due diligence phase – Buyers hope sellers will share the items requested in a timely fashion and be able and available to answer questions or present further information where necessary. Courtesy and common sense should prevail during this delicate phase of the business transfer process.
A smooth closing – Just as the seller wishes, the buyer also wants the closing to be a positive experience for both parties involved. It is a time of celebration, not a venue for uncertainty, debate or hesitation. Closing attorneys experienced in the business transfer process assist immensely with a seamless closing. By the time everyone is seated at the closing table, all questions should have been answered, all pre-closing paperwork completed and the buyer and seller should be confident this is a win-win situation for everyone involved.
A seller who stays involved (for a while) – While a typical buyer probably has some new ideas for the business, almost all buyers want training and initial support from the seller. Buyers want to be successful and retain employees and customers wherever possible and practical. Buyers look for sellers who will spend a week or two showing them the ropes, and buyers are especially appreciative if a seller remains available at a later date should an unexpected question arise. Buyers generally do not want sellers to be involved for a long period of time, unless they have previously presented the seller with an offer of employment. A buyer wants to feel comfortable and prepared as he assumes control of his new enterprise.
As I mentioned in Murphy ‘s previous blog, my experiences working with buyers and sellers who are forthright, reasonable and agreeable have been the most enjoyable and produced the most successful closings. When buyers and sellers have realistic expectations – initially and throughout the business transfer process – and maintain a professional and positive attitude, they typically find the transactions to be pleasant and seamless.
An established business has much to offer a prospective buyer. A proven product or service exists, as well as a customer base. Typically, there are experienced employees and managers in place (and many choose to remain with the company after the sale is complete). There is a cash flow from the first day the buyer takes over the business. The company is already accustomed to paying its debt service in addition to a reasonable salary for the owner. The following are some of the things that will make your business stand out and be attractive to buyers:
Proven verifiable books and records, tax returns
Reasonable Price
Leverage and terms, They want to use bank financing, owner financing and as little of their own money as possible
Solid, verifiable cash flow
Furniture Fixtures and Equipment properly valued and in good condition
Positive appearance of facility, good reputation
Favorable lease and lease options
Training, transition period with the seller
Covenant not to compete, non-solicitation agreement
Prospective business buyers often make the terrible mistake of being overzealous when talking with a seller for the first time. I get it; you’re excited. Perhaps you have spent a ton of time looking at listings and do not want to waste any time on potential businesses that fail to meet your criteria. However, what you say and how you come across when you first engage a seller is critically important and sets the tone for continued discussions.
Can’t We Just Get Along
Your initial goal is to introduce yourself to the seller/business and get a general idea of how it operates. Your first conversation should be to outline what you are looking for in a business, as well as to convey that you are a serious buyer. It is also the time to get a first impression of the other party. Before a seller will divulge any material information, you will be required to execute a non-disclosure agreement and moreover, it is something you should immediately offer to do for the seller. It will put them at ease that you are: a) familiar with the process, and; b) sincere about your intentions.
Don’t be A Bully
There is no bigger turn off than a buyer who comes across as overbearing or a know-it-all, or who acts rudely and immediately requests detailed financial or other confidential information. The process to buy a business is just that a process with specific steps along the way, including the dissemination of information pertinent to making a decision. It all comes in due time and each seller may have a different agenda for giving you that information. Be patient and sensitive to the fact that this may be new to them as well.
Key Questions To Ask The Seller
There are numerous key questions to ask every seller, including:
What is the history of the business?
What are their day-to-day responsibilities?
What challenges do they face?
What have they done to grow the business?
Why are they selling the business?
Are there any key customers, suppliers, or employees?
Can the lease be easily transferred to another party?
What special licenses (if any) are needed to run the business?
How did they arrive at their asking price?
Are they willing to finance part of the deal?
What training will they provide?
Who are their main competitors?
Do Your Research
Parallel to the seller questions is learning about the industry. The Internet is the greatest tool to come along for buyers. There is a wealth of detailed information on every industry but keep in mind that you are probably looking at a local business so do not go overboard with global trends or using billion dollar companies as a comparison that will have zero impact on the business you are evaluating.
The Goal Early On
In the early stages of evaluating the business, there are three key questions you should ask yourself:
Do I like the business?
Can I see myself running it?
Do I trust the seller?
Buying a business is a huge responsibility and it will change your life. Its important to do your due diligence, get to know the seller, as well as gain a very clear understanding as to what you’re getting yourself into. Buying a business is also an exciting opportunity. This is your chance to be your own boss, grow a company and make it your own.
About The Author
Richard Parker is the author of How To Buy A Good Business At A Great Price, the most widely used reference resource and strategy guide for buying a business. He has purchased ten businesses in his career and has helped thousands of prospective buyers worldwide learn how to buy the right business for sale. He is also founder and President of Diomo Corporation – The Business Buyer Resource Center.
