Since 1995 Business Broker Serving all of Tampa Bay Florida

How much is my Business worth?

Thinking about selling your business?

Below is an overview of the steps needed to broker a successful sale.

 

The 1st logical step is to gage the market. To find out what similar types businesses are selling and have sold for based on similar revenues and cash flow. All we need to provide you with a comparable sales report is to know your average annual revenues and average seller's discretionary income SDE. This will give you a ballpark number of what businesses like yours are selling for.

 

Next, the broker needs to prepare a business valuation. We use the most probable selling price MPSP Method as defined by the International Business Brokers Association IBBA.

 

Items needed for the Valuation Report include;

  1. Last 3 years Business Tax Returns

  2. Current Year to Date P&L and Balance Sheet.

  3. Value of Business owned Tangible Assets (Furniture Fixtures & Equipment) FF&E and Intangible Assets (Franchise Agreements, Patents)

 

We also “shop the deal” for financing thru 3rd party lenders such as Banks that are preferred SBA Lenders.

Once we review the Valuation Report and Financing options, we enter into a listing agreement with you for your business. There is no cost or obligation on your part until we sell your business as per the listing agreement.

 

Once we have the listing agreement, we market the business confidentially. We are Members of the Business Brokers of Florida and share the listing with the Association’s 1,000+ Member in Florida and split our fee with whomever sells the business. We do this as we know that we do not have or own every business buyer and there maybe a member that already has a qualified buyer for your business. We are also Members of the International Business Brokers Association and share the listing with their thousands of member worldwide.

 

We respond to all inquiries and have them Sign a confidentiality / non disclosure agreement prior to disclosing any details that would give away that your business is for sale. Once we have the NDA from the buyer, we release some info on your business. We will attend any and all meetings and continue to “drive the deal” until the buyer decides it’s not for them or until closing. We are engaged every step along the way.

 

Why use Vincenzo LoCricchio to help you sell your business?

 

  • 20+ Years Experience Real Estate Broker License Number: BK-624725 Licensure Date: 04/24/1995
  • Certified Business Intermediary (CBI) through IBBA

  • Member International Business Brokers Assoc IBBA

  • Member and Serves on State Board of Directors for Business Brokers of Florida BBF

  • I have personally sold over 200 businesses and 200 franchises since 1995.

 

Click here for your free sold business report

 

Click here to search our database of registered buyers to see if we already have a buyer for your business.

 

Call Vincenzo LoCricchio at 813 400-3030 for a free confidential consultation.

 

 

Free online Report showing Businesses like yours that are currently for sale and how much they have sold for!

 

 

No Cost No Obligation (no kidding!)

Comparative Market Analysis for your Business

What is in the report?

 

Most Business owners in Florida ask me, "How much is my business worth?" "How much can I expect to recieve for my the sale of my business?” The most honest answer is, "as much as a buyer is willing to pay". The first logical stepis to take a look at the market. To compare your business to others that are for sale as well as those that have recently sold. Here is an opportunity to see what other businesses like yours are selling for and how much they have sold for. The report includes select Businesses from our Data Base of over 10,000 Sold Businesses that are similar to yours in Business Type, Gross Sales and Owner Benefit. We also include businesses that are currently listed for sale so you can see the asking price of other businesses like yours. Just fill out the form below and we will send some comparable sold business in Florida to your e-mail.


Sold Business Report Current Listings Sold Listings Florida


Sell my Business what's it worth?


The Need and Methods Behind a Valuation

Introduction

      Along with deciding to engage in business succession planning and finding a successor, it is necessary to value the business.  A valuation is necessary whether the business is to be transferred either to an heir or third party.  If the business is transferred to an heir, it is critical that the fair market value of the business be established in a well supported form.  If the business is to be sold to a third party, a valuation will ensure maximum value will be achieved.

     A business valuation is a report written by a qualified appraiser for purposes including business succession, estate and tax planning, litigation, buy-sell situations and many other purposes including purposes which blend into each other.   Given that purposes behind business valuations differ, methodologies also differ.  Some methods are imposed by the Internal Revenue Code, others by common law, some by contractual agreement, and others by industry.  Following is a brief discussion of different valuation methodologies.

Comparables Price

The comparable price method operates under the assumption that there are other companies comparable to the business being valued that are either publicly held or privately held that recently sold. The IRS suggests that when using this method, at least three comparable companies must be used. Once the comparables have been found, the net income, cash flow, EBITDA, and the Price/Earnings ratio is used to compute the benchmark value. The individual company values can then be weighted and an industry benchmark can then be established.

Capitalization of Earnings


                The consensus among appraisers is that the capitalization of earning power is "the most important single factor in the valuation of most operating companies, such as   manufacturers, merchandisers, and companies providing various services.” At the end of the life of a company, the total worth of that company can be found in the ability it had to generate earnings. This method uses historical data to project future earnings. The method goes back through five years and projects the earnings potential for up to five years, using a growth rate, present value calculation, and expected earnings figures.

Adjusted Book Value (Net Tangible Assets)

                This method, also referred to as the underlying asset value method, is especially useful in valuing holding companies versus operating companies.  Investment houses and real estate companies are examples of holding companies.  This method is also useful for liquidation purposes because it provides the "adjusted" asset value which relates to the fair market value of assets. It is also useful in valuing capital intensive businesses that rely on their asset base to perform work and generate income. An excellent example of this is a construction company. The company's machinery is vital to their operations. This idea can be contrasted with a law practice whose income generating ability does not rest on physical assets of the firm but, rather, on personnel.  The key to this method is to determine the fair market value of all useful assets versus the value as stated on the books of the company.


Excess Earnings Capacity (Goodwill)


                This method is based on the theory that the value of a company is equal to the value of the net tangible assets plus the value of excess earnings (e.g.., goodwill, patents, trademarks, copyrights, etc.). Eight factors are typically considered when calculating goodwill: age of the company, employee turnover, the value of the suppliers and the products sold, market area, potential growth, inventory efficiency, company location, and banking relationships.  Excess earnings attributable to intangible assets are the foundation of the value of goodwill.  Once this calculation is made, the result is added to the adjusted asset value as determined above.

Present Value of Future Income Stream

(Leverage Cash Flow Debt Method)


                A variation of the capitalization of earnings method is referred to as the "Leveraged Debt Concept." This concept takes into consideration the fact that an outside party may leverage an acquisition of the current company and use all of the income to pay the interest on borrowed money.  Currently the cash flow method is becoming more important in valuations as companies tend to “free cash”.

Net Income Residual Approach or Dividend Paying Capacity

                This method looks at the income that is left over for the stockholders as it relates to a company's return on investment. Effectively, it can be referred to as the ability of the company to pay dividends to the stockholders using income that is not needed to operate the business in the future. Dividends are based on earnings after taxes as they relate to investment (stockholder's equity) at the beginning of the year. Dividends represent the after-tax earnings that are distributed to the stockholder instead of being kept in retained earnings to help finance future projects.  This is a key method to determining what an investor would pay for participating in the operations of a privately held company.

Conclusion


                Several methods of valuing a closely-held company have been presented in this section.  Each method has its advantages and disadvantages. Furthermore, no single method provides the absolute value of a company. The appraiser must determine which method will receive the greatest weights based upon the relative importance of each method to the overall success of the company. (10-07)

About the author:

Dr. Bart A. Basiis an expert on closely held companies, an attorney, a Certified Public Accountant and the President of the Center for Financial, Legal & Tax Planning, Inc. He is a member of the American Bar Association’s Tax Committees on Closely-Held Businesses and Business Planning.


Basi & Basi at The Center for Financial, Legal & Tax Planning, Inc.

• Mergers & Acquisitions • Retirement and Estate Planning • Business Valuation • Tax Aspects of Business Decisions • Business Succession Planning • Strategic Planning and Negotiation for Buying or Selling a Business • 4501 W. DeYoung St., Suite 200 • Marion, IL 62959 • Phone: (618) 997-3436 • Fax: (618) 997-8370 • www.taxplanning.com