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How Do You Figure Out the Value of Your Business?

It's easy to value a public company. Just refer to the stock price. But private businesses often need to rely on a valuation report from an expert to find out what their business is worth. Gilmore Jasion Mahler Partner Jeff Denning specializes in business valuation. He says a valuation is an in depth report that you might compare to a real estate appraisal, except it's for your business, not your house.

Learn more about Jeff's expertise in business valuation and forensics, and don't forget to sign up for GJM's free quarterly newsletter The Expert. It offers timely and helpful articles with a focus on business valuation and litigation support.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting services and provides comprehensive services including assurance, business advisory, tax, risk advisory and healthcare management. The Firm's professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.

4 Things to Look for When Hiring a Business Valuation Professional

business valuation, jeff denning, gilmore jasion mahlerBusiness valuation is one of the most important financial decisions you can make for your business. Choosing an expert to work with should not be an impulsive decision. It is absolutely necessary to interview prospective business valuation experts to guarantee a high-quality, knowledgeable professional will handle your unique situation.

There are a few factors you should consider before committing to work with a business valuation professional.

  1. Not All Business Valuation Professionals Are Created Equal

The field of business valuation has grown substantially in the last decade. Unfortunately, with that growth have come several inadequate training programs, generic software systems, and mediocre appraisers. There are some valuation professionals who will tell you exactly what you want to hear to gain your business, without offering in-depth, comprehensive service. 

  1. Cost of Services

Costs associated with a business valuation can vary significantly. During the initial consultation, ask for an estimate of costs for your specific project. Receiving a verbal appraisal is more cost-effective than a written report. A written proposal will be much more expensive, but sometimes is the type of report a client will require. If a client is receiving an appraisal as part of litigation, costs climb even more. It is important to understand what type of appraisal you need and what type of appraisal you are willing to pay for.

Discuss costs upfront with the appraiser and be sure you are on the same page as to what the end product will be. Make sure the appraiser knows exactly what type of appraisal you need and be aware of low-cost appraisals, which can signify professional inexperience.

  1. Professional Designation

Business appraisers come from a variety of backgrounds and possess different experience. To verify the professional has adequate education in the field, ask for their credentials. There are five accreditation program designations that are considered top-notch:

  • ASA (Accredited Senior Appraiser)
  • ABV (Accredited in Business Valuation)
  • CVA (Certified Valuation Analyst)
  • AVA (Accredited Valuation Analyst)
  • CBA (Certified Business Appraiser)

If the professional does not have one of these professional designations, they should not be entrusted with your business.

  1. Ask When You Will Receive Your Appraisal

This is a question to weed out other potentially inadequate appraisers. Ask how long the appraiser will expect the process to take and the steps involved. They should not offer an estimate until they have visited the site, performed personal interviews, and performed a hands-on inspection of company records.

If they offer a quick quote created from their “professional opinion” or generic software, cross them off your list of potential appraisers. It is better to hire someone who is willing to take the time to do things properly, rather than hire someone who may be unqualified or underprepared.

If you are actively searching for a business valuation expert, feel free to reach out to me at 419.794.2000 for a consultation.

Jeff Denning, CPA, ABV, CFF contributed this blog. Jeff has over 20 years’ experience in the field. He is ABV certified, and has heavy experience in litigation. Jeff’s multi-industry experience will guarantee that you receive the best business valuation service, regardless of business type.

Learn more about Jeff’s expertise in business valuation and forensic accounting, and get a better understanding of the process of business valuation in this video explainer from Jeff.  You can also sign up for Gilmore Jasion Mahler’s free quarterly newsletter The Expert with a focus on business valuation and litigation support. Just click here for quick and easy sign up.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting services and provides comprehensive services including assurance, business advisory, tax, risk advisory and healthcare management. The Firm's professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities

Business Valuation: What is the Process?

As a business owner there are many reasons why you may need to know how much your business is worth. Perhaps you're considering selling, or maybe the valuation is required by the IRS or a court of law. Gilmore Jasion Mahler (GJM) Partner Jeff Denning specializes in business valuation and explains the process in this short video.

Learn more about Jeff's expertise in business valuation and forensics, and don't forget to sign up for GJM's free quarterly newsletter The Expert. It offers timely and helpful articles with a focus on business valuation and litigation support. Just click here for quick and easy sign up.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting services and provides comprehensive services including assurance, business advisory, tax, risk advisory and healthcare management. The Firm's professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.

GJM Newsletters Help CFOs Stay Informed

ship sailing into the fogAs chief financial decision maker within a business, the role for many CFOs looks different today than it has in the past. It can often be a journey into uncharted waters. In 2018 this critical c-suite role involves not only company financials, but a broader vison, strategic thinking, trend watching and keeping up on developments with potential impact on the business, including:

  • Sweeping tax reform
  • The skilled labor shortage
  • Safety regulations
  • Changes in revenue recognition
  • Blockchain & other technology
  • Fraud and cyber threats

When you subscribe to accounting firm Gilmore Jasion Maher’s (GJM) industry-specific newsletters you’ll gain access to articles offering solutions and solving problems. You’ll receive insight from GJM experts and additional articles on accounting issues and topics that impact your bottom line.

  • Personal and business tax strategy
  • Best practices and trends
  • Clarification and insight on federal tax changes
  • Technology/cybersecurity content
  • Information on cost control and tax credits

Here’s a look at some recent articles you missed if you weren’t subscribed:

  • “Gilmore Jasion Mahler Experts Explain New Tax Law
  • “Tax Reform and Pass-through Entities”
  • “Construction Accounting Update: New Revenue Recognition Rules to “Go Live” Soon”
  • “The Contractor’s Corner-How Helpful are Digital Documents and E-signatures?”
  • “Quality vs. Volume-How Should Physician Compensation be Determined?
  • “Surviving and Thriving in a Changing Practice Landscape”
  • “Beware of Procurement Fraud”
  • “Economic Damages 101: Learn the ABCs of Calculating Lost Profits and Diminished Value”
  • “Are Your Prices Too High, Too Low or Just Right?” 
  • “Smart Factories and Blockchain: How to Stay on the Cutting Edge of Technology”
  • “Understanding “Nexus” – Know the Risks and Rewards of Operating Across State Lines”

GJM’s five quarterly newsletters include:

  1. Focus: A quarterly publication dedicated to covering such topics as strategic business planning, estate planning, employee issues, customer relations issues, personal tax planning, and other aspects of business management and personal finance.
  2. The Expert: The quarterly newsletter offers timely notifications on valuation and litigation support developments that may have an immediate impact on you and your business.
  3. Practice Management Advisor: A quarterly newsletter providing accounting, tax and practice management insights for the health care industry.
  4. On-Site: A quarterly newsletter providing accounting, tax and business insights for construction and real estate focused organizations.
  5. Manufacturer: Offers tax tips, news and information pertinent to the manufacturing and distribution industries. A quarterly publication, Manufacturer addresses the daily challenges facing manufacturers and distributors as well as strategic and long-term planning initiatives.

Signing up is simple. Just click here and start having timely accounting information delivered right into your inbox. You can also sign up by clicking the big blue "subscribe now" button at the top of the sidebar to the right of this blog article. To be sure you continue to receive GJM newsletter content, we recommend the following:

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Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting services and provides comprehensive services including assurance, business advisory, tax, risk advisory and healthcare management. The Firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.  

What Would It Take To Buy You Out?

By Jeffrey Denning, CPA, ABV, CFF

I get it- you are so busy running your business that it's hard to make time to look out on the horizon. Yet we have heard that failing to plan is like planning to fail. We keep postponing and saying it will be easier to do it tomorrow.

What if tomorrow comes and you meet a serious buyer flush with cash and he or she pops the question? What would it take to buy you out?

The consensus of economic and industry forecasters is that there will be higher growth this year as spending on infrastructure and other delayed needs gets real. Whether buyers are looking to expand markets or add strong managers to help meet current and expected demand, there may be significant opportunities for mergers and consolidation.

As business and tax advisors, we worked with several clients recently to estimate a range of value for their business should they be asked the big question. We also helped them understand what that estimated value may mean to them in after tax dollars invested elsewhere. Then we compared that to their current lifestyle and spending.

These clients are now more informed and prepared should they start considering options like a sale/gift to family, a management buyout, or an outright sale and a walk away value. Each of these merits consideration and preparation.

Not sure where to start? We suggest that you:

  1. Start a conversation with your team and advisors
  2. Ask your advisors about the appraisal process
  3. Ask yourself how much money you would want or need to get out of your business if you did decide to sell

Just three simple steps that will help ensure that when and if the call comes, you’ll have the information you need to make an informed decision.

 Jeffrey Denning is a partner with Gilmore Jasion Mahler, LTD and leads the Firm’s forensic accounting and business valuation practice.