Value Estimator Services
Our Value Estimator Service is a unique offering for situations where a reliable value is needed, but a certified valuation is not necessary. Our clients and their professional advisors tell us this service is the “best value in business valuation”. The core deliverable is a reliable business value documented in a 40+ page report; generally completed within three weeks; and for a fixed price well below the price range for certified valuations. We also offer a Strategic Value Estimator Service. This is when a business owner want to sell the business and there are one or more strategic or synergistic buyers.
Service Comparison Chart (26KB PDF opens in new window)
Service Details
Rationale
We designed this service in response to extensive market research of business owners identifying areas of dissatisfaction with the then current state of business valuation services. The primary objections were: high cost relative to benefit received; uncertain cost; long and uncertain length of time to get results; and lack of explanation of what the value result means and how it can be used. The Value Estimator Service resolves all of these objections.
Uses
Our Value Estimator Service provides a highly reliable estimate of value of a privately-held business at an unbeatable price. This service can be used in most business situations where an accurate value is needed, but a certified valuation is not required. These including:
- Preliminary Estate planning
- Retirement funding estimates
- Buy-sell agreements and insurance
- Owner divorce impact assessment
- Annual valuation of stock options
- ESOP Feasibility Assessment
- Exit planning strategy
- Value maximizing strategy
- Owner buy-in/out for unrelated owners
- Bank loan (SBA & conventional) due diligence
- Valuing a business for sale or purchase for smaller business(es)
This service includes a phone consultation to review the valuation inputs and assumptions with the owner or financial advisor, a 40 or more pages report detailing the findings and a phone consultation to assist in understanding the valuation results.
Valuation Method
The Discounted Free Cash Flow method plus a review of available private company comparables.
Valuation Results
- Total Fair Market Value (includes Control Premium for Minority Discount and Liquidity Discount)
- Minority Value (Value of Ownership Equity without Control)
Source of Company Financials
We focus on the most recent three years of company income statements and balance sheets and/or business federal tax returns.
Value Estimate Interview
Axiom Valuation staff conducts a preliminary review of the company’s financial data and then schedules a phone interview with the client or the client’s designated representative. The Value Estimate interview lasts about an hour and the topics include:
- Brief review of the company’s history and most recent five-year financial performance
- Determination of the appropriate NAICS/SIC code industry designation(s) for the company’s line(s) of business
- Review of how the company sells its products or services, key customers, and competitors
- Determination of a reasonable projection for revenue and profit growth
- Discussion of company’s long-term competitive advantage
- Review of owner discretionary expenses and possible non-recurring expense or revenue items
- Review of firm-specific risks, including customer concentration, supplier reliance, and key person reliance
The objective of this review is to finalize the inputs and key assumptions to use in developing our preliminary value estimate results and preparing a draft report.
Draft Value Estimate Report
Axiom Valuation e-mails the draft report to the client and/or the client’s designated representative, and then schedules a follow-up phone discussion.
Phone Review
The phone review includes a discussion of the draft results and a Q&A session with the client and/or the client’s designated representative conducted by a senior Axiom Valuation staff member. Any changes or corrections identified are made in a timely manner to produce the final report.
Business Value Estimate Report
The value estimate report is 40+ pages long. We provide one hard copy Business Value Estimate Report in a customized binder, and an electronic version of the report in an Adobe Acrobat PDF file.
Additional Questions
Up to one hour of additional phone support for questions after final report delivery is included in this service.