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How To Establish
Value
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SELLERS: have a defense with a list of reasons to support asking price
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BUYERS: understand what you are buying and why the price is fair or not
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GROWTH: understand where the value is in your business so you can focus your growth on areas that are increasing in value
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VALUE FOR DIVORCE: you and your lawyer may want an inexpensive insight to help you negotiate
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INSURANCE NEEDS: how much insurance do you really need?
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TAX NEEDS: produce a list of reasons to support a position
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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.
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Deal directly
with Eric Jordan, the company owner, who has 14 years experience helping
people sell businesses.
Eric Jordan,
President of Pin Services Ltd.
eric@pin.ca tel: (250) 386-0108 toll free: 1-800-606-0310
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VALUATION EXPLANATION:
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. NOT SO MUCH. Most people do not understand financial documents. They will think 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. 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.
I do a lot of repeat work for Lawyers and Accountants.
Recent Value Reports include a Cheese Factory in Western Canada, 2 Bagel Stores in New York near Manhattan, a share dispute in an Alberta oilfield service company, the solicitor side of a lawyer firm in Edmonton, a large independent hair salon in downtown Vancouver, Manufacturing company, Sports and Gun business, Auto wrecker, Golf Apparel business in Florida, Pain Clinic, Franchise Fish and Chip, Cosmetic manufacturer, Several trucking businesses, consulting business, restaurant, and a large flax handling operation in Manitoba and Wisconsin.
Examples of
How Our
Service Works...
(1) I spoke recently to the owner/former owner of a
focused Bearing and Hydraulics Supply Store. He was able
to use our value statement to help him explain what he
had for sale. Using the PIN Value Statement he was able
to sell the business to his employees as it made common
sense to them. The paperwork for the sale is done and
the sale is in progress. Owner feels his employees would
not have understood an official Appraisal or Valuation
that he estimates would have cost 10 times more than my
Value Statement. My client, the business owner, stated
to me that his accountant was impressed with the work I
did. (my
client has given me permission to give his name, phone
number and business name to qualified people)
(2)
I had a Certified General Accountant (CGA), from London,
Ontario, who owned a business. He felt he knew what his
business was worth, but wanted verification. He wanted
to know how an outside buyer would view things. We
plugged his numbers, estimates, and conclusions into my
formula and came up with $418,500. My formula and
my reasons were completely different from how he came to
his estimated $400,000 Value. This took about an hour on the phone and
another 2 hours work for me afterward – all of which I
emailed to him. The accountant now had logical reasons,
with his real numbers, to support his asking price. This
was presented in a manner common people could
understand. (client name available upon qualified
request)
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Client Examples...
1)
Eric, My accountant was impressed with your formula.
They made the necessary changes, and I used this
information to sell my business to my employees. I
could not have done this without your Value
Statement. Thanks.
(Name
available on qualified request.)
2)
An Electrical Contractor purchased a Value
Statement (February 2010) - They intend to sell over the
next couple of years and wanted to get an idea of value.
We provided a Value Statement the contractor was very
pleased to have. They felt our service was very good
value for the money, useful, accurate, and caused them
to think differently about how to sell their business.
(I have permission to release their name to qualified
party)
3)
Ted and Leslie Smith, who own
Viking Lodge listed on
www.pin.ca, had a Value Statement done in February 2010.
After reviewing the numbers, we received a glowing
report from both Leslie and her accountant. Leslie
stated that she sent the Value Statement, including
working papers, out to a prospective buyer. The
prospective buyer told Leslie they were pleased to have
something both clear to read and easy to understand.
This comment was echoed by Leslie's accountant; as
Leslie said, "most people can not read Financial
Statements and the Value Statement makes it clear and
easy for average people to understand.
4)
We recently had a client with a Dog Grooming Business
who decided, after reviewing her Value Statement, that it
was not in her best interest to sell at the present time.
Perhaps in a couple of years, but not now.
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Eric Jordan,
President Pin Services Ltd.
tel: (250) 386-0108, toll free: 1 800-606-0310
e-mail: eric@pin.ca |
PAYMENT BY VISA,
MASTERCARD, AMERICAN EXPRESS or DISCOVER.
Visit our main site
www.pin.ca
to see 1000
businesses for sale.
*Notice to reader:
Pin provides a Value Statement. These are numbers given to us by the client. We arrange these numbers into a form and proprietary formula specially designed to illustrate value in a format that is easy to read and understand. Pin does not know if the numbers given were correct for ratio used to determine
defense of value. Numbers used must be verified by your accountant, other trusted sources, or proven facts.
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PIN VALUE STATEMENT IN AND OF ITSELF IS NOT A
VALUATION OR APPRAISAL. The purpose is to combine
the PIN formula with your accountant’s numbers for
your business so you and your accountant can
determine value for the purpose of advertising. In
order for it to be accepted by a financial
institution as a Valuation your accountant will need
to verify the numbers and specify the correct ratios
for your industry and area; Financial Institutions
will only consider documents certified by
accountants. |
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