Small Business Valuations — How They’re Helping Main Street America

Mar 30 2016

small business valuationsMost people aren’t too aware of exactly how many businesses there are in the United States, or how big they are. All we really ever hear about on television is how businesses are overwhelmingly preferring to do business overseas, and are increasingly opting to build their operations on foreign soil.

While this is true in specific cases, there are actually a very large number of businesses operating in the United States today. By our own standards, many of them are “small businesses,” or businesses with less than 500 employees.

If somebody asked you to guess what percentage of American businesses were considered small businesses, keeping the above metric in mind, what would your guess be? Half of them? A quarter of them? The actual number is 99.7% — much higher than most tend to guess.

With that relatively small amount of employees (compared to some of the big corporations out there today), small businesses aren’t generally able to support a team dedicated to assessing asset valuation and earning potential. It’s a difficult and tedious figure to accurately determine, and that has historically prevented businesses from operating with a complete knowledge of their exact positioning in the business world.

Thankfully, those days are over. Business appraisal services are quite popular now, and have left the days of guessing or devoting hundreds of hours of labor into calculating your business comps long in the past.

All a business needs to get started today is a working understanding of why they need or want a business valuation — usually easy enough to come up with — and all the required pieces of the puzzle that valuation software needs in order to produce a figure.

Once this has been done, a valuation can take place. Small business valuations are so accurate, and the algorithms at play so sophisticated, that the very need of your business for a valuation affects the final outcome of the report. Alongside this, they’re known to measure how your business measures value, and under what circumstances.

Your business deserves a business valuation report. Don’t delay in having small business valuations experts look at your organization.




Small Business Valuations — What You Need to Know If Your Business is Being Valued

Mar 21 2016

small business comps

mall business comps are probably the most reliable way for a small company to gain an understanding of how much their operation is actually worth. Now, in matters of business, things get a little more complicated than simply measuring a company’s budget. Otherwise, businesses would not need to seek the services of a business valuation firm, or any other entities that perform these calculations.

Businesses choose to have a valuation performed because of the benefits they stand to gain from them. Knowing their true earning potential and being able to better assess risks allows businesses to operate with more confidence than their small business counterparts which have not had a valuation of any kind performed.

A lot goes into a valuation. Small business comps are complicated and look at factors which may seem counterintuitive or irrelevant. For example, the very act of requesting small business comps or a comps valuation directly affects the rating a business would earn.

Since a small business comp is essentially a measurement of a business’s worth, which is extremely subjective (even with hard data, as there are different sorts of “value”), the results are never absolute. How a business measures value and the circumstances they measure value by are key contributing factors in determining the score or value a business ultimately earns.

Despite their complexity, business valuations generally emphasize the usage of two types of documents. Company financial information is obviously of paramount importance, so income statements and balance sheets are easily some of the most important documents in the process. In order to get the most accurate reading possible for a business valuation, it is recommended that at least three to five years of income statements and balance sheets are available.

If you can provide these things and have determined why you need a business valuation, you’re more or less ready to have one performed. They may take some time, but there are virtually no better ways available to gain a true working understanding of how much earning potential your small business currently has.




What Small Business Valuations Are Teaching Us About America’s Businesses

Mar 18 2016

Business valuation

Business is, well… It’s big business in the United States! Starting and operating your own business is as much a part of the American dream as white picket fences and apple pie. People have been travelling to the U.S. to achieve their hopes and dreams since even before the nation’s inception. You’d be hard pressed to find another country where starting and operating a business is so possible. It can still be tricky — it’s definitely not always easy — but the new, up-and-coming business feels right at home in the United States.

In total, there are about 26 million businesses operating in the U.S. today. That’s about one-twelfth of our population. Granted, there are some individuals out there who own more than one business. In fact, there are businesses whose entire modus operandi is to buy and sell businesses. So it’s not exactly like one out of every 12 Americans owns or operates a business. On the other hand, the amount of commercial entities in operation today weighed against our population paints a picture not too radically different from that. Americans love to start, sell, buy, and run businesses.

Business valuations, a tool used to analyze the viability and survivability of a business, have given us some interesting insights into how these businesses are operating. Of the 26 million businesses currently running today, only around 5 million have employees! If you’re at home or at work and you’re following the math on this, that’s around 21 million businesses in operation today that don’t even have employees! To bring the point home, only .3 percent of businesses in the United States have more than 500 employees.

Without company valuation tools like these to perform small business valuations, we would have much less insight into how these companies actually functioned. Business valuation services not only benefit the businesses having the process performed, but on the entire employment industry. Contact a certified business appraiser today if you feel it’s time to have your business evaluated and analyzed.

PeerComps, Inc.701 S. Howard Avenue, Suite 203
Tampa, FL 33606