Although a business valuation is a complex undertaking, the process is fairly simple and consistent.

Phase I - Initial Discussions

Initial discussions take place between the company's owners/principals/advisors and senior members of Appraisers LLC. These preliminary discussions are used to gain a general understanding of the client's business valuation requirements. Basic financial and operational information is shared and the purpose of the business appraisal is discussed. We often provide a draft engagement letter that outlines the scope of work and pertinent details regarding the business relationship that would ensue.

Phase II  - Engagement Letter

Once we have been selected to perform a business valuation, a formal engagement letter is finalized with the germane features being:

• Purpose of the business valuation
  • General corporate purposes
  • Strategic
    • Sale Transaction
    • Due Diligence
    • Financing, attracting capital
  • Compliance
    • Purchase Price Allocation
    • Goodwill Impairment
    • ESOPs
    • Estate and Gift Tax
    • Tax Planning 
  • IRS dispute
  • Litigation
• Standard of value (e.g. fair market value or fair value)
• Scope of the report - a thorough description of the business valuation process
• Discussion of fees and expenses

Phase III  - Exchange of Information

We will issue the client a document request list that outlines the information required to prepare a formal business valuation. The list is tailored specifically to each client and is predominantly focused on financial information. Please see FAQs for a sample document request list.

Phase IV - Valuation Analysis

During this phase we perform the bulk of our analysis which typically includes:

• Economic and industry analysis
• Synthesize financial information to understand a company's financial position and important financial drivers
  • Calculate a variety of ratios and metrics that allow us to assess the health and value drivers of a company
• Site Visit/Interview
  • The interview process is typically a minimum of several hours as we seek to gain an in-depth understanding of the company and the forces affecting it.
• Apply various business valuation methods (up to 11)
  • While there are many different ways to value a company, the three most common methods are Discounted Cash Flow, Guideline Company and Comparable Transactions. We analyze a significant amount of information regarding publicly traded comparable companies as well as look at transactions involving similar companies, both private and public.

 Phase V - Report Delivery

• Draft Business Valuation Report

Once our analysis is concluded we prepare a draft report and review the findings internally. Then we share the draft report with the client in order to ensure factual accuracy and integrity. The purpose of the draft report is not to discuss the conclusion, but rather to ensure that we have not misinterpreted or omitted any key information.

• Final Business Valuation Report

After a thorough review folloing our draft report, we incorporate any relevant changes and finalize the business valuation report. We deliver bound copies as well as an electronic version. We also available to make formal presenatations and field questions from advisors.

Phase VI - Follow Up

We are always available after an engagement to discuss the company appraisal with the company and its advisors.