What is a Business Valuation Company?
Business valuation companies in Darwinplay a critical role in informed local business transactions. They are used for calculating the potential of investments, resolving disputes, raising capital, buying or selling companies and more. Licensed business valuation advisors are qualified to provide expert advice and guidance to organisations of all sizes and industries.
Business valuations firms:
- calculate the true market value of any company
- support business owners and investors in making informed decisions
- combine proven methodologies and techniques to conduct valuations
- assess the likes of a company’s financials, assets and market trends.
The certified valuers that perform these services are specialised in a wide range of companies and skill sets. They are typically accountants, financial analysts and licensed property valuers.
Conducting an accurate valuation requires a comprehensive understanding of local market conditions and the state of numerous industries nationwide. It’s also necessary to comply with a range of regulations and standards that ensure quality and consistency.
Business valuation experts have the requisite training and expertise to tailor their reports to the specific needs of each client. It’s a utility-driven service suited to various official and private purposes that can be used by law firms, restaurants, IT companies, retail stores and more.
Business owners, investors and professional advisors can all benefit from regular valuations.
How a business valuation company starts
All business valuation companies begin with certified financial professionals. These could be certified public accountants or licensed business brokers. Essentially, any professional with the required expertise to analyse and assess the value of an organisation.
All business valuation companies need to obtain the necessary qualifications and licenses to provide legally certifiable valuation services. Organisations such as the Australian Institute of Business Brokers offer the requisite training for business valuation certification.
Ultimately, any organisation of business valuation experts is judged on the quality of their services.
In an industry where they play such a vital role and where reputation is everything, only those upholding the highest standards for quality and consistency can guarantee repeat clients.
Business valuation vs property valuation
Business valuations are distinct from real estate valuations, though they do employ similar skill sets and can be carried out for similar purposes.
Both services aim to establish the fair market value of their subject. Real estate valuations look at factors such as location, land size, building size and the condition of the property. Clients seek them out for purchases, sales, refinancing, insurance, tax and legal purposes.
On the other hand, business valuers assess factors such as financial performance, assets, liabilities, market competition and industry trends. Their purposes generally centre around acquisitions, mergers, sales, financing and shareholder disputes, as well as various legal affairs.
Property valuation relies on techniques known as the comparison, cost summation and income approaches. This means that, when valuing real estate, licensed valuers tend to rely on market data and property characteristics.
Business valuers, meanwhile, prefer to focus on financial statements and industry analysis.
The key differences between real estate valuation and business valuation services in Australia lie in the types of assets being valued, the methods used to value them and the reasons for which the valuations are used.
What services do business valuers offer?
As with a standard real estate valuation, there are numerous suitable reasons to seek out a business valuation. Having knowledge of your company’s valuation is a high-utility asset in and of itself.
Popular reasons for getting a valuation on your company include:
- Selling or buying: a comprehensive valuation will help to determine the ideal sale or purchasing price for organisations across all industries and sizes.
- Mergers and acquisitions: determining the market value of a company is critical in negotiating a fair deal and helping all parties make informed decisions.
- Estate planning: knowing the precise value of an organisation is necessary to ensure that an estate is fairly distributed among its heirs.
- Partnership disputes: valuation can help to reach a fair settlement between all parties.
- Tax purposes: the likes of estate and gift tax, as well as transfer pricing are all related to the enterprise's value and so that will need to be calculated to pay the right amount of tax.
These examples clearly illustrate why valuers require such diverse experience and qualifications. Every valuation service must be fully tailored both to the type of company and the end goal of the valuation.
Summary
Business valuation companies play a keep part in any healthy economy. They employ certified financial and valuation professionals, trained to establish the fair market value of a company. These include restaurants, retail shops, shipping companies, law firms and far more.
This requires far-reaching knowledge across numerous industries, with experience assisting companies with taxation, settlements, mergers, acquisitions and others.
They are distinct from real estate valuers but hold some similar skills and training.
Every valuation is dependent on a series of tried-and-true scientific methods that can be applied across multiple industries. They are comprehensive investigations that are compiled into detailed, legally certified reports that guarantee accuracy, quality and transparency.
It’s a highly regulated service that can have ripple effects throughout the national economy. For this reason, licensed business valuers take their work very seriously.
For more information on the wealth of business valuation services available to you, or to receive a free quote on any of our services, contact the team at Business Valuations Darwin today.