Edmonton Business Valuation And Appraisal . com – Appraisal, business valuation, business evaluation, Edmonton AB. Certified by Eric Jordan CPPA – Tax issues, divorce or sale. Valuation for divorce proceedings.

 

Valuation and Appraisal to Support Litigation
Qualified Expert Witness

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BUSINESS VALUATION AND APPRAISALS
CERTIFIED BY ERIC JORDAN, CPPA

BUSINESS VALUATION for $1,000 to $5,000
EdmontonBusinessValuationAndAppraisal.com

(780) 665-1350


WE WIN IN COURT

Need a Bulletproof Business Valuation?

"I greatly appreciate the work Eric did on the Valuation of my company. It stood up in court. (April 2017) The Judge soundly admonished the Chartered Business Valuator who tried to contradict Eric's valuation. If someone needs confirmation and wants to speak to me, Eric has permission to release my number." (Julian)

Second Opinion on a Questionable Valuation?

We find that most small business valuators concentrate on Asset, Market, and Income approaches developed in the  1970’s. These are generally easy to defeat in 2017 as most businesses are now made up of 50% or more in “intangible assets” these valuators neglect, or have no means, to properly measure.

25 FACTORS AFFECTING VALUE

This is the key Point: If someone is presenting or proposing a valuation without taking these factors into consideration the valuation number is likely to be misleading and almost certainly not accurate for a small business.

  • Financials
  • Return on Investment
  • How has R&D been accounted for?
  • Shareholder Agreement (if one exists)
  • Value of Employees (cost of recruitment and training as a group)
  • Client Base and Cost to Rebuild
  • Value of Supply Chain
  • Value of Distribution Network if one exists
  • Internet Presence and Use (social network)
  • Dominance if any in the Marketplace
  • Knowledge Base of Owner and Employees
  • Processes and Procedures Documentation (How well are all aspects of the company documented?)
  • Industry Averages
  • Lease Terms
  • Leasehold Improvements
  • Equipment
  • Inventory
  • Risk
  • Currency Fluctuations and Geopolitical Considerations
  • Opportunity
  • Liquidity
  • Leverage - Cost of money.  Is leverage applicable and if so at what risk?
  • Minority Interest (if applicable)
  • Special Interest Purchaser (Partners are also special interest purchasers as they have more knowledge, interest, and opportunity, with less risk than regular buyers.)
  • How well is the business/practice expected to function with changes in management? (if applicable)

Return on investment is always my first and last consideration.


When a small publicly traded TSX (Toronto Stock Exchange) listed company needed a report on fair value to meet TSX requirements they turned to Eric Jordan...

Testimonials at bottom of page.

Eric Jordan, President
Free consultation.
Call or email now!

1-800-606-0310
eric@pin.ca

2700 Commerce Place,
Edmonton AB CANADA T5J 4N9
780-665-1350

Profiles of some 2016 clients:
Most are in Edmonton, Calgary, Vancouver, Ottawa and Toronto

  • Multi Million Dollar Distribution Business- Valuation for purpose of sale.
  • Plumbing and Gas Business- Valuation for purpose of divorce proceedings.
  • Multi Million Dollar Eco Tour Business- Valuation for purpose of expansion loan.
  • Law Practice- Valuation for purpose of sale.
  • Lawn and Yard Maintenance business- Valuation for purpose of divorce proceedings.
  • Art Studio Franchise- Valuation for accounting purposes and CRA requirements.
  • Plumbing Business- Valuation for purpose of divorce proceedings.
  • Irrigation and Snow Removal Business- Valuation for purpose of divorce proceedings.
  • Large Retail Bakery- Valuation for purpose of sale to employee over 5 years.
  • Software Distribution rights in Canada- For Australian Parent Company (Agency Dispute.)
  • Janitorial Supply Business- Valuation for purpose of partnership dispute.
  • Tree Pruning and Lawn Business- Valuation for purpose of sale.
  • Battery Distribution Business- Valuation for purpose of sale.
  • Software Testing and Quality Assurance Company- Valuation for purpose of partnership dispute.
  • Blind Manufacturing and Installation Company- Valuation for purpose of legal action in partnership dispute.  This went to court on May 27, 2016 and resulted in our client receiving over 80% of the amount he sued for.
    Client is available as a reference.
  • Classic Car Renovation Business- Valuation for multi-million dollar lawsuit in Florida launched by Canadian partners.
  • Dance Studio- Valuation for purpose of establishing value for pending sale.
  • Cross fit GYM- Valuation for purpose of establishing a viable price for buyer to offer.
  • Jim’s Burger Location in US- Valuation for purpose of divorce proceeding.
  • Two Wholesale Bakeries- purpose of the valuation was to find values so the companies could merge.
  • Sign Manufacturing Business- Valuation for purpose of a minority shareholder leaving company.
  • Landscaping and Excavating Company- Valuation for purpose of divorce.
  • Day Care Facility- Valuation to support litigation and negotiation for damages inflicted by City in zoning error.
  • Accommodation Business- Valuation for purpose of sale.
  • Smoker Operation (8 pigs at a time in size)- Valuation for tax purposes.
  • Flooring Business- Valuation for purpose of sale.
  • Retail Wine Business (Franchise concept)- Valuation for purpose of sale.
  • Prop Business- Valuation for purpose of partnership buyout.
  • Computer Retail- Valuation for purpose of potential purchase.
  • Music Composer Business (original soundtracks for documentary movies and videos)- Valuation for purpose of divorce proceedings.
  • Two Pharmacy Locations- Valuation for purpose of sale consideration.
  • Luxury Bed and Breakfast combined with Events Business- Valuation for the purpose of sale.
  • Pool Building Company- Valuation for purpose of sale to family.
  • Automotive Related Business- Valuation for purpose of sale.
  • Specialized Manufacturing Firm within Printing Industry- Valuation necessary as someone expressed interest in purchase.
  • Daycare- Valuation for purpose of possible sale. (Interested Purchaser came forward.)
  • Focused Builder- Valuation for purpose of establishing value for employee buy in.
  • Software Maintenance Contractors- Valuation for purpose of possible merger, (many millions of dollars.)
  • Chiropractic Practice - Valuation for purpose of buy in.
  • Wholesale Food Business- Valuation for purpose of settling partnership dispute.
  • Accounting Firm- Valuation for purpose of divorce.
  • Call Centre- Valuation for internal purposes.
  • Hair Salon- Valuation for purpose of employee buy in.
  • Convenience Store and Gas- Valuation for purpose of lease dispute.
  • Specialized Builder of Restaurants- Valuation for purpose of employee buy in.
  • Wholesale Food Manufacturing and Distribution- Valuation for purpose of partnership buyout.
  • Retail Sporting Goods Franchise- Valuation for purpose of purchase.
  • Diesel Repair Shop- Valuation for purpose of partnership dispute.
  • Cellular Repair Company- Valuation for purpose of internal planning.
  • Roofing Company- Valuation for purpose of partnership consideration.
  • Upscale Personal Services Company- Valuation for purpose of internal planning.
  • Specialized Wheel Business- Valuation for purpose of sale.

How Financials Can Be Deceiving:
(This is the kind of practical solution offered by our system.)

Accounting for tax purposes is totally different than interpreting financial statements for Business Valuation Purposes. Let us give you just one example: (Think Partnership or Divorce)

For tax purposes R&D is an expense in the year the R&D occurred. For the purpose of an accurate valuation the R&D should be amortized over a period of 5 to 12 years. HUGE DIFFERENCE.

The financials must be normalized to reflect proper treatment of R&D. If we didn’t do this a company could spend 95% (or all) of the profit on R&D and might successfully claim the company to be worth very little for a short period of time. Perhaps not fraud but certainly manipulation, depending upon the purpose. (Divorce or other partnership)

HOW TO ESTABLISH VALUE FOR TAX, SALE, OR OTHER LEGAL ISSUES.
HELPING BUYERS AND SELLERS UNDERSTAND VALUE

SELLERS:
Have a defense with a list of reasons to support asking price.

BUYERS:
Understand what you are buying and why the price is fair or not.


GROWTH:
Understand where the value is in your business so you can focus your growth on areas that are increasing in value.


VALUE FOR DIVORCE:
You and your lawyer may want an inexpensive insight to help you negotiate.

INSURANCE NEEDS:
How much insurance do you really need?


TAX NEEDS:
Produce a list of reasons to support a position.


LOANS:
Present a clear picture to your lender of the assets your company owns; you may need clear identification of intellectual property and list of supporting reasons. You need to prove that hard assets represent only part of your value.

VALUATION EXPLAINED:
People assume a buyer will be able to understand what they are selling and how profitable your business is, based upon balance sheets and profit and loss statements. THEY DON’T. Most people do not understand financial documents. They may think from looking at your statements that you are not making much money. Financial documents and tax returns are (or should be) prepared to show your business making the least amount of money possible; thereby enabling you to pay the least amount of tax possible. NOT EXACTLY THE SORT OF THING THAT WILL IMPRESS A BUYER WHO DOES NOT UNDERSTAND.

This is why MOST PEOPLE need a common sense VALUATION. We take the information from your financials and find the TRUE NORMALIZED NET INCOME OF YOUR BUSINESS to show a prospective buyer what is really happening in your business when the tax considerations are taken away.

All of this is done in a way that ordinary people can understand; ordinary people like the buyer, the buyer’s spouse, a financial backer or a banker.

Recent Value Reports include a Cheese Factory in Canada, 2 Bagel Stores in New York near Manhattan and an Excavating Business in the Canadian oilfields.

When a small publicly traded TSX (Toronto Stock Exchange) listed company needed a report on fair value to meet TSX requirements they turned to Eric Jordan...

Testimonials at bottom of page.

Eric Jordan, President
Free consultation.
Call or email now!

1-800-606-0310
eric@pin.ca

2700 Commerce Place,
Edmonton AB CANADA T5J 4N9
780-665-1350


How to value an Edmonton business; the valuation or appraisal is a process.  Once we have all of the information we need, via the intake conference, your valuation report will be delivered to you approximately one week from the time we receive the financials, but could be prepared in as little as 48 hours in extreme circumstances. We refer to our evaluation as a Value Statement.
WE COME AT THIS FROM FOUR DISTINCT VIEWPOINTS:

EXISTING ACCOUNTING:

The view from an accounting perspective; relying on the the numbers created by the clients' existing accountant, then finding the real "normalized net income" through a proprietary process.

RISK:
Looking from the insurance viewpoint and assessing risk to buyer.

HUMAN CAPITAL:
From the point of view of a resume broker; assessing the value of the
human capital involved in the business.


INTELLECTUAL PROPERTY AND PROPRIETARY PROCESSES:
Understanding, assessing and estimating the intellectual property and proprietary knowledge that is transferred with the business.  Change of ownership and management does matter.
INTAKE CONFERENCE:
This is a 2 to 3 hour conference call that can include as many stakeholders as required.
As no two businesses are the same, the questions will vary.
Below is a list of some of the areas that we will cover.

(1) Why: What is the purpose of the valuation?

(2) Who: Value with whom owning and managing the business?

  • Your current value with current ownership and management?
  • Value with a new business owner with less experience?
  • Value with buyer like you with similar business management experience?
  • Value with an upscale buyer who has the financial ability to build on what you have accomplished in your business?
  • These WHO questions make a huge difference to the final appraisal.

(3) Normalized Net Income: I must understand what questions to ask to be able to determine the real 'Normalized Net Income.' This figure is seldom what you see in your year-end accounting, which is generally calculated to determine the lowest amount of tax legally payable.

  • Owners and families are often overpaid or underpaid depending upon individual tax situations.
  • What would the owner have to pay someone to fill his/her position in the business?
  • There are about twenty more normalizing questions that must be answered and these can be different depending upon the answers given to previous questions. This is where experience counts.

(4) Leasehold Improvements: These need to be covered regardless of whether the building is leased or owned.
It is important that the right questions are asked in any comprehensive appraisal.

(5) Hard Assets: Determining fair market value.
Book value means nothing if we want to know the true value of the business.

  • Business Equipment
  • Business Inventory

(6) Intellectual Property: Copyright, Proprietary Processes, Business Operation Manuals. These are your operating manuals; the step by step instructions on how to run your business and how to train others to operate your business. This greatly affects value; positively if it you have them and negatively if you don’t have them, and much more negative if it would not be possible for you to have a practical manual that would allow for your business to continue if you were unable to function.

(7) Value of Cash Flow: This is calculated by finding the normalized net income then multiplying it by a ratio determined by risk, opportunity, and the intellectual property affecting the means to produce.

(8) Soft Assets: Do you have intellectual property that has fair market cash value outside of your business?

(9) Risk: What are the possible risks to your business?
No appraisal can be completed without properly understanding risk.

  • How long is the business lease?
  • Are there reasonable options to extend the lease?
  • If the owner of the building also owns the business has the rent been paid at market rates?
  • Are you in a one industry area, or is the area changing?
  • Are industry trends your friend or enemy?
  • Are there any Government regulations?
  • Staffing?
  • Competition and pricing challenges?
  • Changes to accessibility? Road changes?
  • How good is the succession plan, and do you even have one?
  • Operations and Training Manuals - How complete?
  • Additional questions depending upon the answers given.

Your valuation report will be delivered to you approximately one week from the time we receive the financials, but could be prepared in as little as 48 hours in extreme circumstances.

As you can well understand, no computer program, gross sales or other rule of thumb guessing techniques are going to be helpful for you in determining the real value of your business. In fact, these techniques could harm you. Valuation and appraisal is our full time business. We do a lot of business valuations.

How to Value an Edmonton Business
Generally $1,000 to $5,000.
Call for exact pricing for your situation.

Business Valuation
for Your Edmonton Business


Eric Jordan, President
Free consultation.
Call or email now!
1-800-606-0310
(780) 665-1350

eric@pin.ca
Business Valuations / Appraisals
Certified by Eric Jordan, CPPA.
Appraisals to Support Litigation

Qualified Expert Witness

PAYMENT BY VISA, MASTERCARD, AMERICAN EXPRESS or DISCOVER.

Visit www.pin.ca to browse our businesses for sale.


REFERRALS / TESTIMONIALS


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EdmontonBusinessValuationAndAppraisal.com - Appraisal, business valuation, business evaluation, Edmonton AB - tax issues, divorce or sale.