Business Valuations

Business Valuations

Business valuers provide advice on issues related to the value of a wide range of businesses, intellectual property and intangible assets which may or not may be property-centric.

 

They often prepare a valuation of a whole business entity, taking into account the current financial performance of the business together with any plans or forecasts that set out the prospective financial performance of that business. The entirety value of such businesses may be the starting point for determination of partial interests, eg minority shareholdings, or partnership shares.

 

The business valuer will consider transactional evidence provided by sales of similar businesses, although the circumstances and basis upon which the consideration was arrived at in comparable transactions are often unpublished.  S/he therefore also considers the performance of other businesses in the same or similar industries and reviews, if possible, how the markets value these comparable businesses. The business valuer may or may not also consider the current level of debt in the actual business, before reporting either an equity or enterprise value, depending on the instructions received.

 

Although trade related property valuers concentrate on specific types of property where the market values the property as a trading entity, the business valuer has a wider remit. A factory for example would be valued as a property by a commercial valuation surveyor (not a trade related property valuer) but the business including intellectual property and intangible assets operated within the factory (whatever it was) would be valued by a business valuer.  This is because the business itself could be moved to an alternative factory. The factory, although an asset of the business, may not itself be fundamental to the continuation of the business entity.

 

The business valuer adopts a number of standard approaches to valuations.  The income approach, places a net present value on the benefits of owning a business by discounting expected future cash flows at an appropriate discount rate.  The market approach compares the business to other businesses in the same industry to determine an appropriate multiplier that can be used to capitalise profits.  If the Business Valuer is valuing shares in a business that is not a publicly traded company, he/she will have to consider a discount for lack of marketability, particularly if the comparable properties are publicly traded.

 

Depending upon the instructions, the business valuer may have to have regard to different valuation bases.  Market value, in simple terms the value that should apply on a transaction between willing parties in an arm’s length transaction is the most commonly adopted.  However, in appropriate cases it may be necessary to adopt fair value, where the parties to the transaction are identified and the value reflects the respective interests of those parties, in, for example, shareholder dispute cases.

 

The business valuer will, as part of the due diligence, need to consider the current value of tangible assets used in the business.  Where the business is property-centric, such as hotels, public houses or care homes the business valuer will almost certainly work closely with a trade related property valuer as the value of the properties used in the business will form a key component of the value of the business and to avoid duplication.

Both business valuers and trade related property valuers use their experience to draw on market knowledge.  While not mutually exclusive, their respective  expertise is usually complementary; they will often work together and rarely compete.

 

Charities Tax

Our team of expert Valuers offers charitable organisations appropriate and timely advice to ensure that they meet their regulatory requirements regarding property transactions.

 

When a charitable organisation seeks to dispose of property or land under Section 36 of the Charities Act of 1993, trustees are required to obtain and take under consideration a written report prepared by a Chartered Surveyor who is acting on behalf of the charitable trust for the property and not on behalf of the charity beneficiary.

 

This report must include confirmation as to whether, in the surveyor’s opinion, adequate marketing efforts have been undertaken to ensure that the asset is sold at the highest possible price so that the charity receives all it can.

 

We are experienced in providing the necessary reports that comply with all the laws in these circumstances. We provide charities all the required information in an easy-to- use format.

 

Business Rates

A major fixed cost of any business is its business rates and our specialty is in lowering this fixed liability. We do this by incorporating our in depth knowledge and understanding of the Rating System.

 

We do more than just file appeals against the assessment on a client’s property. We verify Rate demands to ensure that the calculations prepared by the Council are correct, we ensure that you receive all relevant exemptions and reliefs that you are entitled to by law.

 

We advise you on Empty Rates and how best to mitigate your liability. We will submit all the relevant appeals. We make sure you are informed on all the circumstances in which an appeal can be made, whether or not a given circumstances is appropriate in your case.

 

We are fully proficient in negotiating with those in the Valuation Office to advocate on your behalf. If for some reason your appeal is not amicably settled with the Valuation Office, we can go a step further and represent your interests at a Valuation Tribunal Hearing at no cost to you. We work on a no win, no fee basis for this service.

Contact us

If you have any queries or wish to make an appointment, please contact us:

 

01332 411 554

 

2nd Floor

Lisbon House

5 - 7 St Mary's Gate

Derby

Derbyshire

DE1 3JA

 

info@bakemans.co.uk

 

Or use our contact form.

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Contact us

If you have any queries or wish to make an appointment, please contact us:

 

01332 411 554

 

2nd Floor

Lisbon House

5 - 7 St Mary's Gate

Derby

Derbyshire

DE1 3JA

 

info@bakemans.co.uk

 

Or use our contact form.

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