BUSINESS APPRAISALS

As an integral part of the first stage of the selling process, valuation of the business is one of the most important issues. It is highly recommended that sellers obtain a third-party business appraisal from a well-respected business appraisal company. A business broker / intermediary should not be the one to appraise the company and they are generally not sufficiently qualified to do so. Even if they feel that they are qualified, a broker's own business appraisal can create doubt in a buyer's mind and, in many cases, can create potential legal liability. However, the most important issue to understand is that regarding credibility and believability with potential buyers and lenders.

Credibility and believability with buyers is an issue when the seller's broker is the one who has appraised the company. They sometimes see the interests of the seller being placed in front of their own. Often, third-party business appraisal companies reduce or eliminate this issue.

Experienced and successful professionals in the business brokerage industry know this is generally the key to maximizing the selling price of a company, eliminating the largest portion of frustration and disappointment, and saving all parties involved a great deal of generally expensive time. While most sellers believe that their company is worth more than what actual market value is, there are many instances in which sellers receive less for their companies than they should. An appraisal from a well-respected, third-party business appraisal company creates credibility and believability with buyers and lenders while at the same protecting and maintaining the seller's interest in his/her company.

If the seller waits until the buyer appraises the company, then it is the buyer's best interest to obtain an appraisal on the company that is as low as possible. Likewise, waiting for the lender to require an appraisal will only delay the entire process. Therefore, since an appraisal will probably be performed sometime during the selling process, it is in the Seller’s best interest to obtain a business appraisal in the beginning stages, not after the company is marketed to buyers. Additionally, it is critical that sellers realize and understand that most lenders and federal loan guarantors, especially the SBA, require a third-party appraisal.

Edling & Wyatt uses what many believe to be some of the most respected business appraisal firms on both a local as well as national basis. We have established relationships and a history of doing business with these business appraisal firms and have several optional plans for our clients who are considering obtaining a business appraisal. Business Appraisals range in price from about $2,000 to over $20,000. However, they generally average $2,500 to around $3,800 depending on many factors.

We invite you to contact us for more information regarding business appraisals.

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