— Assess & Value —
Business Valuation
To create an effective exit strategy, it is vital to understand how businesses are valued. An accurate valuation allows the business owner to make a realistic estimate of the profit from a sale, and whether this is going to be sufficient to meet your future needs.
Our approach to business valuations is comprehensive and forward looking. An extensive analysis of your business looks at historical financial performance, a range of operational factors, an assessment of key risk matters as well as identifying opportunities to maximize future value.
The outcome of business valuations provided by Ascend Business Partners is a roadmap for making business improvements that will increase the value as well as estimate the value opportunity that could be achieved if the roadmap is successfully followed.
Business Valuations as a Planning Tool
A misconception of business valuation
There is a common misconception that valuing a business is a simple financial calculation that is done with a great degree of certainty. This is not the case!
The valuation of a business is extremely complex because of the diversity of companies, industries and individual business performance that need to be considered. The true value of a business is what any potential buyer is willing to pay at any particular point in time, and this fluctuates depending on whether the settlement involves cash, shares or debt financing. Other factors such as timing of payment and the workout involved will affect the price.
Valuation Methodologies
There are three different approaches that are commonly used in business valuation:
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The Income Approach generally looks at future income or cash and discounts it to today's value. An example is the “Discounted Cash Flow” method.
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The Asset-based Approach bases its valuation on the assets of the business. For example “Net Asset Value.”
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The Market Approach compares the business against other businesses in the same industry and takes into account size and location and other specific business factors. An example of this is the “Multiples of EBIT” approach.
Each technique has its advantages and drawbacks. These must be considered on a case by case basis and most valuation professionals will use a combination of approaches.
There are a number of drivers available for you to maximise the value of your business. Identifying and implementing these drivers will give your business the best chance to stand out from the crowd and be sold for a premium. The reduction of risks faced in the business is one of the best ways to create an immediate increase in value, as new owners will be prepared to invest at a premium in return for reliable ongoing business income.
We work with you to minimise risk by ensuring you have good financial records and reporting, an appropriate business structure, strong protection of your assets and mitigation for all the risks identified in our comprehensive risk review.
Business Value Enhancement
The premium value drivers that we implement to maximise business value include:
Reducing owner (and key staff) dependency
Creating a sustainable competitive advantage
Putting in place strong governance systems
Positioning your business for strategic acquisition
Arrange your Business Valuation and Review
Ascend Partners can arrange to undertake a formal review of your business and provide:
Assessment capabilities that assess financial and operational business factors
Industry specific assessments, because one size does not fit all
"What if" analysis to assess the potential increase in value for any planned business initiative
The Business Value Gap
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A ‘Business Value Gap’ is the difference between the value of your business today and what you need it to be at time of sale. A shortfall can have a significant impact on your retirement plans and may force you to reassess your desired standard of living in retirement. Worse case - it may mean you can’t afford to sell.
Retirement should be the best years of your life - the time for you to reap the rewards of your labour. As you approach retirement you need to determine your business value gap.
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Do you know?
What your business value needs to be at time of sale?
How many years it is until you can afford to sell?
A future profit target that provides you a higher business value and a desired standard of living?
Business value gap analysis is a simple process of determining your retirement income and assets, business value (current and future) and strategies to improve business profit and wealth.
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If your business value gap analysis reveals a shortfall in business value then you will need to implement business strategies to improve your profit before you sell. For example, improving your average sale per customer will increase sales, gross margin and net profit. Knowing what your business value needs to be means you can calculate your future profit, gross margin and sales targets.
Value gap analysis provides business owners and managers with peace of mind from understanding the direct connection between business value and a future standard of living at retirement.
Unlock the True Potential of Your Business
Take the Quick Risk & Value Assessment
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Many business owners unknowingly leave money on the table when it comes to their business value. Risks can lurk beneath the surface, impacting your ability to scale, exit, or sell for the price you deserve.
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A simple yet powerful tool designed to help you:
Identify key risks that may be limiting your business growth and value
Pinpoint opportunities to increase profitability and reduce risk
Gain expert insights to prepare for a stronger, more valuable business exit
Get Your Free Risk & Value Report Now
Simply answer a few quick questions, and we’ll generate a personalised report outlining:
Your business’s key risk areas
Value drivers you can leverage for higher returns
Actionable steps to enhance business value & future-proof your success
It only takes 2 minutes to complete – and the insights could be game-changing!