Business valuations for buying or selling of Canadian small businesses 

Are you an entrepreneur looking to buy a small business, and you are unsure if the business is worth what the owner is asking?  Or are you looking to sell your business but are unsure what you could get for the business? 

 

A business valuation can help you understand whether an owner is asking too much for a business or whether your business is worth what you thought. In both cases, a business valuation is the first step. Business valuations for smaller businesses can be performed by an M&A professional, Business Broker, Lawyer, CPA, or anyone with business training in valuations.  If you are buying or selling a larger business $5M+ you will most likely want to engage a Chartered Business Valuator.

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At RK Fischer & Associates, we perform business valuations for businesses under $5M in revenues for business owners looking to sell. We suggest that you have this performed at least 2-3 years before you plan to sell your business, so you have time to increase the value if the valuation is not what you expected.  We can work with you through business coaching to put a plan in place to make the changes needed to improve your business value. If you want to purchase a business, we can provide you with a business valuation to help you determine whether the business is worth the asking price, as most business owners tend to overvalue their business.  

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Our business valuations are performed by our business partner, who is a CPA. Our valuations look at four different measurements of business value:
 

• Financial (Net Book Value) / Net Asset Approach

• Discounted Cash Flow

• Earnings Multiples

• Income Approach / Earnings

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We will not perform the market /comparative value method, as this requires access to recent transactions of similar businesses in the market to determine the value of your business. Though a very valid method, in small businesses, there are so many variables as to why a business sold at a specific price versus larger businesses.

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You will receive a report outlining and explaining each valuation measurement. If we believe you need a business valuation from a Chartered Business Valuator based on your circumstances, we can provide you with a referral.  We will not perform business valuations in the case of court proceedings such as shareholder or marital disputes or estate settlements.  A CBV has extra training in court proceedings and evidence presentation in this case.

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If you need a business valuation in Toronto or anywhere else in Ontario, look no further than RK Fischer & Associates. To learn more about our business valuation engagement, click the button below or contact us and set up a free consultation to see if your business can benefit from a business valuation.