Efrain Conrique and Associates
Business Valuations

The Value of Your Business

A business’ fair market value is the cash price a buyer would pay to a willing seller, provided that neither is under any compulsion to buy or sell and each has equal knowledge of the relevant facts.

When You Are Selling a Company

Business owners decide to sell for a many different reasons. For some, it is primarily an instinctive conclusion inspired from a need to resolve problems or a desire capture opportunities. For others, it may be a judgment motivated by pursuit of long range business- or estate-planning goals.

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Many situations — e.g. applications for financing, purchases of insurance, ESOP’s, succession planning, shareholder discussions and buy/sell agreements, mergers and acquisitions, litigation, and effective estate and tax planning — require that you be aware of the most current value of your business.

No matter how intimate your knowledge of your business, it can be difficult to account for all the factors and weights influencing its value. You should have a current professional valuation of your company and consider having one performed at least every three to five years and IRS regulations require that ESOPs be valued yearly.

Determining the fair market value of a business requires expert knowledge of valuation methodologies and of the many issues that may have to be taken into account. The factors professional appraisers typically consider include:

Historical and current financial data, including projections of future earning power.

The value of existing assets and an estimate of the capital expenditures necessary to continue the
    present earning pace.

The source and diversity of the company income and earnings.

The strength of the business and its management, relative to its competition, now and for the future.

Current facilities and legal issues.

The purpose of the valuation.

The amount of interest in the company that a transaction involves, particularly whether it is more or
    less than fifty percent.

Please note that business valuation is a complicated and complex discipline requiring extensive experience. It is prudent, particularly when significant amounts of money are involved, to hire a professional business appraiser to perform the valuation. Mr. Efrain Conrique is a Certified Business Opportunity Appraiser with more than 12 years experience in performing business valuations.

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