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Consider the Strengths of Your Business

brokerDealerAn Indianapolis business valuation in preparation for a sale requires multiple steps to get an accurate value. In a previous KLP posts, we’ve explored how valuation skills are needed to prepare income statements and balance sheet adjustments before a business analyst can leverage market guides to determine the value of the business.

The next step is to use business valuation skills to perform typical ratio analysis between the business to be sold and the market guideline firms. These ratios for business to be sold vary from the typical business valuation because it will scrutinize both strengths and weaknesses.

A recent QuickRead article by Lone Peak Valuation Group principals Rick Hoffman and Jeff Pickett outlined different purposes of evaluating the strengths and weaknesses.

Strengths.  These are areas where the company is stronger than its immediate competitors.  These areas should be analyzed to understand why this strength occurs and whether they are sustainable.

We recently explored how identifying weaknesses  early in the pre-sale process can help increase the firm’s value. In the meantime, you can start to proactively prepare your business for sale by calling us today for an Indianapolis business valuation.

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