"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.
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.
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
Procedures Documentation (How well are all aspects of
the company documented?)
and Geopolitical Considerations
Leverage - Cost of
money. Is leverage applicable and if so at what
Minority Interest (if
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.
Eric Jordan, President
Call or email now!
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.
FOR A LIMITED TIME We
are offering up to $3,500 in additional services to each of our
valuation clients at no additional cost!
objective is to sell your business we can offer you free
advertising on www.pin.ca which is one of Canada's oldest,
independent business-for-sale-by-owner websites (established
We can also
give your business local, regional, national and international
advertising exposure on our data base system, optimised for
maximum search engine results.
If you can't
use these services yourself you can pass the offer
along to family or friends. (Certain restrictions may apply.)
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)
OUR UNIQUE BUSINESS OPPORTUNITY:
We need analysts in Ottawa and elsewhere;
English and a second language would be an asset.
Become licensed to use our proprietary process
in understanding the 25 Most Important Factors
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...
bottom of page.
Eric Jordan, President
Call or email now! (613)
116 Albert Street,
Ottawa, ON K1P 5G3 Canada
Meet Our Team of Industry Specialists: Once your valuation is prepared,
it will be reviewed by at least three team members.
Eric Jordan, CPPA Founder Author of "25 Factors
Affecting Business Valuation" 1-800-606-0310
Hilda Kariuki, MBA Analyst - Peer Review Comes with 15
years commercial insurance experience handling high valued
claims business losses, oil and gas equipment, manufacturing,
restaurants, auto shops, etc. in both Canada and the United
Allan Paris Analyst - Peer Review Executive
Professional in the global engineering and manufacturing arena
for over 30 years managing professional teams and projects on a
global basis. Contracted to many international companies
including Apple, Samsung, Nokia, Sony, Panasonic, Ford,
Chrysler, Microsoft, Siemens, Google, AT&T, IBM, Hoover and many
more. Owner of multiple businesses including manufacturing,
engineering, engineering design, import/export and manufacturing
Michael Duffy Management Consultant - Analyst - Peer
Review More than 20 years of national and international
banking experience before opening Canova Bancorp Inc. in 1997.
Michael offers CFO for hire service and can be contacted
Norm Francoeur Analyst - Peer Review 35 years
experience in mechanical, plumbing, heating, electrical, auto
body, carpentry, and irrigation expert. Teaches a class at Royal
Roads University. Norm provides us with hands on peer review
expertise about anything to do with trades
Reid Nunn Analyst - Peer Review Reid comes from the
insurance risk, broker and food service industry. Reid adds a
lifetime of experience mostly from a US perspective, to our peer
Greg Adkins Peer Review Greg comes with technical
knowledge of internet marketing, machining, construction and
contractor management. Greg offers special expertise in
succession planning through his own company Harmony Succession
Planning and has deep insight into how these organizations run.
Greg can be contacted directly
Debby Schlutter Administration Debby has been the web design manager at Pin.ca for the past 20 years.
Debby can be contacted directly at email@example.com
Investment is Always My First and Last Consideration
JUDGES - LAWYERS -
PARTNERS IN DIVORCE PROCEEDINGS PARTNERS IN BUSINESS
DISPUTES - BUSINESS BUYERS BUSINESS SELLERS - CANADA
Bring the judge a valuation
based on experience and logic. WHAT KIND OF BUSINESS VALUATION DO YOU NEED?
FAIR MARKET VALUE - ONGOING OPERATION • FAIR
MARKET VALUE - ASSETS IN PLACE BUT NOT OPERATING • ORDERLY
LIQUIDATION • ORDERLY
LIQUIDATION VALUE OVER TWO TO FOUR MONTHS
VALUATION Are you insured for replacement costs of
rebuilding a business after a loss including Intangible
Assets? Have your insurer acknowledge and accept
valuation prior to buying insurance. • Value of
recruitment and training of a group of employees to the
position of cohesively working together as they were
prior to the point of interruption, damage or loss. • Value of rebuilding client base to where it was prior
to the point of interruption, damage or loss. • Value
of reimplementation of systems and procedures in place
prior to the point of interruption, damage or loss.
LOANS: Banks are losing a lot of business these
days to lenders who understand intangible assets. Define
the value of your intangible assets. If your bank is not
considering the value of your clearly defined
intangibles you need to find an new lender who is better
educated in your business model.
Our Valuations are generally half
price or less than others. This is possible because we
are more focused on Small Business Valuations and not
working for Corporations.
The niche we serve is
Small Business Valuations with special expertise in
understanding intangible assets that are often missed
as they don't show up on the Balance Sheet. In addition
to Financial Statements I take into account; processes,
procedures, value of supply chain, value of distribution
network, knowledge base of owner and employees, value of
employees (cost of recruitment and training as a group,)
value of client base, Internet presence and use,
documentation and risk.
The rate of return on the
Normalized Net Income is always the first and last
Value to who? The bank, the seller,
the buyer; our valuations can include more than one.
How to value an
Ottawa 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 in
approximately one week. 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
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.
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.
What is the purpose of the valuation?
(2) Who: Value with whom owning and managing the
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
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.
(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?
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?
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.
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
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.