Business Valuation

Determining the value of a business not only involves the appraisal of personal property and intangibles such as goodwill, it often includes real estate owned by the company and used in the business operation. In fact, in some businesses a majority of the value of the business is tied to its real estate holdings. Another important asset of the business is its income stream. This is especially true of businesses that make lots of money and have few hard assets. In such a case, the income is capitalized to determine a Market Value of the Business. This process involves the determining of a capitalization rate which can be a challenge to the inexperienced Business valuation appraiser. Businesses that have both substantial hard assets and a healthy income stream also present a challenge to the appraiser. In this case, care must be exercised not to double dip, or to count the value of both the hard assets and the income stream as if both are independently responsible for contributing to the value of the company as a whole. These issues make selecting a knowledgeable appraiser paramount to obtaining a creditable Market Value conclusion.

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