OUR SERVICES
Business Valuation Services
Independent, well-documented valuations for selling, buying, financing, succession and tax planning, prepared under AICPA valuation standards so your number holds up with buyers, lenders and the IRS.
What Is a Business Valuation?
And when you need one.
A business valuation is an independent, documented estimate of what your company is worth at a specific date. We analyze your financial performance, industry, market conditions and risk factors, and apply recognized valuation approaches (income, market and asset-based) to arrive at a supportable conclusion of value. The work follows the AICPA's Statement on Standards for Valuation Services (VS Section 100).
A valuation is more than a number. The report explains how the value was reached, which assumptions drove it and how sensitive it is to changes in earnings, growth or risk. That documentation is what makes the conclusion credible to buyers, lenders, partners, courts and the IRS.
Business owners typically need a valuation when selling or buying a business, bringing in or buying out a partner, setting or funding a buy-sell agreement, applying for an SBA loan, planning a gift or estate transfer, issuing equity to employees, or resolving a shareholder or marital dispute. A valuation is also a useful planning tool well before any of these events, because it shows what drives value and where it can be improved.
Business owners typically need a valuation when selling or buying a business, bringing in or buying out a partner, setting or funding a buy-sell agreement, applying for an SBA loan, planning a gift or estate transfer, issuing equity to employees, or resolving a shareholder or marital dispute. A valuation is also a useful planning tool well before any of these events, because it shows what drives value and where it can be improved.
When Do You Need a Business Valuation?
Most valuations are triggered by a specific event. These are the situations we see most often.
Before you go to market or make an offer, you need a supportable view of value. A valuation shows what the business is worth based on earnings, growth, risk and comparable transactions. It gives you a realistic asking price or offer, a basis for negotiation, and an understanding of which factors buyers will focus on.
When an owner retires, leaves, becomes disabled or passes away, the remaining owners need a fair and defensible price. We value ownership interests for buyouts and help set or update the valuation terms in buy-sell agreements, so everyone knows in advance how value will be determined.
Lenders financing a business acquisition or change of ownership often require an independent business valuation, and SBA loans above certain thresholds require one. We prepare valuations that meet lender requirements and clearly support the purchase price.
Transferring ownership to family members, trusts or the next generation requires a well-supported value for gift and estate tax reporting. Our reports document the approach, assumptions and any applicable discounts for lack of control or marketability, so the value can stand up to IRS review.
Companies issuing stock options or other equity to employees need an independent valuation of common stock to set exercise prices and comply with Section 409A. We prepare valuations that support option pricing and are updated as the business grows or raises capital.
When owners disagree or a marriage ends, the value of a business interest is often the central issue. We provide independent, well-documented valuations that both sides, their attorneys and the court can rely on.
Our Business Valuation Services
Independent, well-documented conclusions of value that hold up with buyers, lenders and the IRS.
Valuation Analysis
Review of your financials, industry and risk factors using income, market and asset-based approaches.
Detailed Valuation Report
A written report explaining the approach, assumptions and conclusion of value, ready for third-party review.
Value Drivers & Planning
Clear insight into what drives your company's value and practical steps to increase it before a sale or transfer.
Business Valuation Methods and Approaches
Every valuation considers three recognized approaches. The weight given to each depends on your business, industry and purpose of the valuation.
The income approach values a business based on the future economic benefits it is expected to generate.
We use two main methods. The discounted cash flow method projects future cash flows and discounts them to present value at a rate that reflects the business's risk. The capitalization of earnings method converts a single normalized earnings figure into value, and suits companies with stable, predictable results.
Before applying either method, we normalize earnings. That means adjusting for owner compensation above or below market, one-time expenses, related-party transactions and other items that don't reflect ongoing operations.
We use two main methods. The discounted cash flow method projects future cash flows and discounts them to present value at a rate that reflects the business's risk. The capitalization of earnings method converts a single normalized earnings figure into value, and suits companies with stable, predictable results.
Before applying either method, we normalize earnings. That means adjusting for owner compensation above or below market, one-time expenses, related-party transactions and other items that don't reflect ongoing operations.
The market approach values a business by comparison to similar companies that have been sold or are publicly traded.
The guideline transaction method uses pricing multiples from actual sales of comparable private businesses, such as price to revenue, EBITDA or seller's discretionary earnings. The guideline public company method applies multiples from publicly traded companies in the same industry, adjusted for differences in size, growth and risk.
This approach reflects what buyers are actually paying in the market, which makes it especially relevant for sales and acquisitions.
The guideline transaction method uses pricing multiples from actual sales of comparable private businesses, such as price to revenue, EBITDA or seller's discretionary earnings. The guideline public company method applies multiples from publicly traded companies in the same industry, adjusted for differences in size, growth and risk.
This approach reflects what buyers are actually paying in the market, which makes it especially relevant for sales and acquisitions.
The asset approach values a business based on the fair market value of its assets minus its liabilities.
Under the adjusted net asset method, balance sheet items are restated from book value to current market value, including real estate, equipment, inventory and identifiable intangible assets. This approach is most relevant for holding companies, asset-intensive businesses, and companies that are not generating sufficient earnings or are being liquidated.
Under the adjusted net asset method, balance sheet items are restated from book value to current market value, including real estate, equipment, inventory and identifiable intangible assets. This approach is most relevant for holding companies, asset-intensive businesses, and companies that are not generating sufficient earnings or are being liquidated.
The value of an ownership interest can differ from its proportionate share of the whole business.
A minority interest may warrant a discount for lack of control, because the owner cannot direct operations, distributions or a sale. Interests in private companies often warrant a discount for lack of marketability, because they cannot be sold quickly or easily. A controlling interest may carry a control premium instead.
We analyze and document each adjustment, which is especially important for gift, estate and buyout valuations.
A minority interest may warrant a discount for lack of control, because the owner cannot direct operations, distributions or a sale. Interests in private companies often warrant a discount for lack of marketability, because they cannot be sold quickly or easily. A controlling interest may carry a control premium instead.
We analyze and document each adjustment, which is especially important for gift, estate and buyout valuations.
We don't simply average the results. We evaluate the strengths and limitations of each approach for your specific business and purpose, weight them accordingly, and reconcile them into a single, supportable conclusion of value.
The report explains this reasoning in detail, so buyers, lenders, attorneys and the IRS can follow exactly how the number was reached.
The report explains this reasoning in detail, so buyers, lenders, attorneys and the IRS can follow exactly how the number was reached.
Before any calculation begins, we define what kind of value is being measured, because the same business can have different values depending on the purpose.
Standards of value
We also determine whether the business should be valued as a going concern or on a liquidation basis.
Standards of value
- Fair market value is the price between a willing buyer and a willing seller. It's required for gift, estate and most tax purposes.
- Fair value is often defined by state law or accounting standards, and is common in shareholder disputes and financial reporting.
- Investment value is what the business is worth to a specific buyer, reflecting that buyer's synergies.
We also determine whether the business should be valued as a going concern or on a liquidation basis.
- Defining the standard and premise of value up front makes the conclusion appropriate for its intended use and defensible if challenged.
Valuations for Business Owners and Private Companies
Including transactions and ownership changes.
Private Company Valuations
Earnings, cash flow and risk analysis
Comparison to similar businesses in the market
Owner compensation and key-person factors
Customer concentration and marketability
Know what drives value and how to increase it
Comparison to similar businesses in the market
Owner compensation and key-person factors
Customer concentration and marketability
Know what drives value and how to increase it
Transactions and Ownership Changes
Selling the company or acquiring a competitor
Mergers and new investors
Partner buyouts
Share transfers to family or employees
Lender, SBA and purchase price allocation support
Mergers and new investors
Partner buyouts
Share transfers to family or employees
Lender, SBA and purchase price allocation support
Our Business Valuation Process
Most valuations are completed within 3 to 6 weeks of receiving complete information.
Discovery call
We learn about your business, the ownership interest being valued, the purpose of the valuation and any deadlines from buyers, lenders, attorneys or the IRS.
Fixed-fee proposal and engagement letter
You receive a defined scope, valuation date, standard of value, timeline and fixed fee before any work begins.
Information request and management interview
We send one clear document request list covering financial statements, tax returns, forecasts and ownership agreements. We then interview management about operations, customers, risks and growth plans.
Analysis and valuation
We normalize earnings, research industry and market data, apply the income, market and asset approaches, and reconcile the results into a supportable conclusion of value.
Report and review
We deliver a detailed valuation report and walk you through the findings, assumptions and key value drivers. We're also available to answer questions from buyers, lenders, attorneys or the IRS.
Why Choose GreyWood CPA for Business Valuation?
Independent, well-documented valuations with fixed fees and a clear timeline from day one.
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Fixed, transparent fees with no surprises - Prepared under AICPA valuation standards
- CPA-level understanding of your financials and tax position
- Reports built to withstand buyer, lender and IRS review
- Clear explanation of what drives your company's value
- Nationwide service, fully remote
Frequently Asked Questions
We charge a fixed fee based on the size and complexity of your business, the purpose of the valuation and the level of report required. You'll know the exact fee before any work begins.
Most valuations are completed within 3 to 6 weeks of receiving complete information. If you have a firm deadline from a buyer, lender or attorney, let us know on the discovery call and we'll plan around it.
Typically three to five years of financial statements and tax returns, current-year interim results, any forecasts or budgets, ownership and operating agreements, and details on key customers, employees and assets. We send one clear request list tailored to your business.
A broker's opinion is usually a quick estimate based on industry rules of thumb to help list a business for sale. A business valuation is an independent, documented analysis prepared under professional standards. It's what lenders, attorneys, courts and the IRS expect when the value needs to be supported.
Our valuations for gift and estate purposes are prepared to meet IRS requirements for a qualified appraisal, with full documentation of the methods, assumptions and any discounts applied. No valuation can guarantee the IRS won't review it, but a well-supported report significantly reduces the risk of a successful challenge.
Yes. We serve clients nationwide and work fully remotely, with secure document sharing and virtual management interviews.
Know What Your Business Is Worth.
Tell us about your business and why you need a valuation. We'll confirm the right scope and send a fixed-fee proposal at no cost.