Real Estate Information |
|
The 5 Biggest Mistakes Made When Getting A Business Appraised
Most business owners will, at some point, want or need to know how much their business is worth. They will be faced with the task of finding someone to perform a business appraisal or valuation. Since this is unfamiliar territory, the owners often make some big mistakes. Mistake #1 - Automatically Hiring Your Existing CPA Firm Business owners often assume that all CPAs are competent in business valuation. In fact, many CPAs have very little or no business valuation experience or training. Don't expect your CPA firm to tell you if they are not proficient in this area. Firms are often reluctant to; turn down additional revenue, admit their lack of expertise, and refer you to a competitor. Ask your CPA firm if they have any staff that are credentialed and experienced in business valuation. Then get an anonymous list of their prior business valuations by business size and type. Don't be too concerned if they have not valued a company in your same industry. Regular and recent business valuation experience is much more important. If they don't have adequate business valuation experience, ask if they would recommend a firm that does. Mistake #2 - Automatically Hiring a Referred Professional Referrals mean different things to different people, so you must ask on what basis it is being given. If it based on a brief meeting at a networking event, then don't give it much weight. Referrals based on reputation alone are only slightly better. Seek referrals based on first-hand dealings with the referred professional. All referrals, even high quality ones, need to be evaluated further to determine their business valuation competence. Mistake #3 - Using Rule of Thumb Formulas Many business owners believe there is some secret formula that can be used to accurately value their business. There are many rules of thumb and they are not a secret. Rules of thumb can be useful to get a "quick and dirty" estimate, but they have some serious flaws. No one really knows the quality and the quantity of the data on which they are based. The formulas typically use multiples that are expressed in ranges (like 1 to 2 times annual sales) that result in widely varying values. The formulas provide no guidance on how to select an appropriate number within that range. Most importantly, these formulas do not account for the unique characteristics and factors that affect the value of a specific business. If a business valuation will be given to third parties or subject to dispute, rule of thumb formulas just won't stand up to the scrutiny. Mistake #4 - Paying Too Little Business valuations typically cost thousands of dollars. In an attempt to save money business owners often look to get one on the cheap. There are a number of sources on the Internet that will value a business for substantially less cost. The old adage - you get what you pay for - applies here. These services use various formulas, proprietary data, checklists, and etc. to arrive at an estimate. Some even come with rather impressive looking reports. In general, these services are just high-priced, dressed-up rule of thumb formulas. Mistake # 5 - Paying Too Much Business valuation firms often set minimum fees and limit the levels of service without regard to the cost restraints of smaller companies. By omitting some valuation procedures that typically aren't relevant to smaller businesses and preparing summary-style reports, firms can legitimately and significantly reduce the cost of a business valuation. A high cost, full scope business valuation is often overkill for a small businesses. Look for a firm that can match your needs more closely to save money. Fees can vary greatly so it pays to shop around. Seek the best professional for the best price, not necessarily the lowest price. By taking the time to do some basic research business owners can avoid these mistakes, hire a competent business valuation professional, and get the most value for their money. Copyright 2005 David Coffman David E. Coffman is a Certified Public Accountant (CPA) who is Accredited in Business Valuation (ABV) and a Certified Valuation Analyst (CVA). He is the author of the "Guide to Selecting the Right Professional to Value Your Business". The Guide provides detailed instructions on how to find, and a comprehensive checklist to evaluate business valuation professionals. The Guide can be downloaded for FREE at his firm's (Business Valuations & Strategies) website => http://www.bus-val-strat.com
MORE RESOURCES: Inside the Growing Alarm Over Blackstone's BREIT Real-Estate Fund Business Insider Study finds Atlantans lost 1.25 billion in equity in real estate dealings with corporations WSB Atlanta Migrant shelter landlord near Fulton Market sued by lender Crain's Chicago Business Congressional Lawmakers Launch Bipartisan Real Estate Caucus National Association of REALTORS® The Blackstone Fund BREIT Faces Big Questions The New York Times Specialty real estate: A 'unique' alternative investment Yahoo Finance Howard Hanna Real Estate Services to Donate $10,000 to UVA Health Children's UVA Health Newsroom Want to fire your real estate agent? Try this. Business Insider Rising Star Sean Gabay on What Lies Ahead for Real Estate Insurance — and How to Keep Clients Happy Workers Comp Forum Recent commercial real estate transactions 5/8/24 BizTimes Milwaukee Correa, Alford, Mann, Pettersen Launch Bipartisan Real Estate Caucus Fullerton Observer Real Estate Showdown: A Brownstone vs. a Farmhouse Boston magazine Influencers in Retail Real Estate 2024 Globe St. Pinstripes to continue growth with new real estate partner Chain Store Age Flagship Communities Real Estate Investment Trust Announces First Quarter 2024 Results GlobeNewswire Images: Real Estate Roundup Rotterdam (12 photos) | Photo Galleries | dailygazette.com The Daily Gazette ERA Real Estate Launches New Coaching Program RisMedia.com Venbrook taps Newfront's Harney for real estate and healthcare divisions Insurance Insider US Redfin’s $9.25 Million Agreement Ends Legal Battle Over Inflated Commissions – Forbes Advisor Forbes The Office-Market Meltdown Comes for Trump's Prized Wall Street Building The Wall Street Journal Employee pay, real estate top Erving Town Meeting warrant Athol Daily News Bisnow seeks a commercial real estate reporter Talking Biz News Never Count Real Estate Agents Out — RISMedia RisMedia.com Real estate outlook in Las Vegas Valley: 2008 reminders and all-time records KTNV 13 Action News Las Vegas Wake Up Your Real Estate: Keeping Your Home Fire Safe NBC Right Now Pinellas Beaches Real Estate April 30-May 3 The Gabber Newspaper Real Estate: April 22 to April 26 Newport This Week How small businesses are approaching pay, hiring, real estate - Bizwomen The Business Journals Austin Real Estate Mogul Nate Paul Tops Travis County Delinquent Taxpayer List for Third Year Hoodline Study finds Atlantans lost 1.25 billion in equity in real estate dealings with corporations WSB Atlanta Exclusive: Google will exit prominent S.F. waterfront office tower San Francisco Chronicle Best States to Buy a House in 2024: Find Your Dream Home! Norada Real Estate Investments Is The Housing Market Going To Crash? Bankrate.com The Results of this $550 Million Foreclosure Case Could Reshape the Commercial Real Estate Industry Yahoo Finance Real Estate Roundup: Five homes in Rotterdam, each less than $300000 The Daily Gazette Berks County real estate transactions for May 5 Reading Eagle Houston Real Estate Icon Martha Turner's Treasures to Be Sold In a Powerhouse Estate Sale — With Mental Health ... PaperCity Magazine 'This isn’t just real estate. It’s about patients': Bob Coughlin talks new JLL role The Business Journals Georgetown commercial real estate co. leveling up with Austin's fast-growing suburbs The Business Journals Real Estate Woes and Price Deflation Hit China: Is the U.S. Next? Elliott Wave International Milwaukee real estate growth shouldn't hurt downtown commuters Milwaukee Journal Sentinel Real Estate Court Fairburyjournalnews One of Nashville's largest office towers is on the market The Business Journals Ingles relies on real estate holdings, but sometimes leaves properties vacant for years • Asheville Watchdog Asheville Watchdog Yun: It's Impossible for Home Sales to Remain Low National Association of REALTORS® Massachusetts real estate transactions for Hampden, Hampshire and Franklin counties May 5, 2024 edition MassLive.com IPE Real Assets May/June 2024: Real estate comeback? IPE Real Assets Property's Waiting Game Is Getting Harder - WSJ The Wall Street Journal Utah Clinches Top Spot for America's Best State in 2024 Norada Real Estate Investments Past, meet Future: Triten Real Estate Partners, Radom Capital team up to breathe new life into a familiar Heights relic The Leader News We Think That There Are More Issues For Heiwa Real Estate (TSE:8803) Than Just Sluggish Earnings Simply Wall St Florida real estate groups sue over law banning Chinese nationals from trying to buy homes Creative Loafing Tampa Nearly 100,000 U.S. Properties Faced Foreclosure Filings in Q1 2024 - Norada Real Estate Investments Nearly 100,000 U.S. Properties Faced Foreclosure Filings in Q1 2024 Norada Real Estate Investments |
RELATED ARTICLES
Ten Creative Financing Techniques Do all the creative financing techniques you hear about really work? Yes, actually. They probably have all worked somewhere for someone at least once. Buying Outer Banks (OBX) Investment Property So, you're thinking of purchasing a rental property at the beach. Historically, real estate investments have proven to be a wise investment strategy. What is a Loft Apartment? What is a loft apartment? At the most basic level a loft apartment differs from a regular apartment because of the open layout. Lofts are open floor plans with few if any walls separating the living, dining, living and sleeping areas. Afford A Dream Home In Belize Shopping for property in Belize is not as simple an undertaking as you might initially expect!Firstly, real estate agents as we know them are non existent! Real estate brokers that do exist are likely to be unlicensed, unregulated and certainly not trained or insured.Secondly, the majority (and I mean the majority) of property for sale is not advertised!But with property prices remaining affordable, the quality of property available attractive, the climate beautiful, the people welcoming, the quality of life incredible and the opportunities in Belize plentiful, more and more people need to know HOW they can go about procuring themselves their dream home in Belize. How To Sell A Home That Didnt Sell If your home has just come off the market and hasn't sold, don't be discouraged. The reason it didn't sell may have nothing to do with your home. Are Signs Important? Signage, though quite fundamental in nature, plays an important role in the home selling process. The Yard Sign should be two-sided, easy to read, and look great (defaced or worn signs can negatively impact curb appeal). According To Sellers, Silence Isnt Always Golden' When trying to sell a home, silence isn't always golden especially when you're expecting your real estate agent to call. In fact, it's one of the leading complaints among sellers in the real estate market. How Do I Implement The Lease Purchase Plan? Well, as we have discussed in previous newsletters first you have to set up goals for yourself, both long term and short term. Don't forget these goals define how your business is run. Real Estate Investing - Protect Your Privacy An irate tenant or disgruntled home-buyer, with the help of a willing attorney, can readily prompt a property search for a property owner in public records. The target of the search becomes someone who has deep-pockets as reflected in real estate assets. The Listing Contract: Its All in the Details Now that you've chosen a real estate professional to sell your home, you'll need to work together to complete a listing agreement. This legally binding contract authorizes a broker and his or her real estate professionals to find a buyer for your home, according to the conditions specified in the contract. How Much Home Can You Afford In Todays Market? If you haven't figured your credit worthiness and borrowing power lately, you might be surprised at how much home you can afford to buy in today's market! Mortgage Lenders are very optimistic about the future of the real estate market and as a result they are willing to loan more on properties than you might expect! And, lenders are making loans at rates not seen since the late 1960s.We,as your Realtor, will be most willing to align you with one of our favored lenders for a private and complete analysis of your borrowing power. Real Estate Investing - Books,TV Infomercials, and Seminars Real estate investing has become popularized today because of real estate investing TV infomercials and traveling seminar circuits. But real estate investing has not always been so popular. Real Estate Appraisal - Do It Yourself For single family homes, there are two basic methods used in real estate appraisal. They are replacement cost analysis, and using comparable sales. Home Not Selling In Todays Hot Market? Tips and Ideas to Help You Sell So, your selling your home. Prepare yourself both physically and mentally for the agony of the endless phone calls and interruptions to your daily schedule. Purchasing Florida Investment Property And Various Considerations Purchasing Florida Investment PropertyConsidering researching the purchase of Florida Investment Property or properties for sale in central Florida? Do you find yourself wishing you didn't have that lawn to mow and the constant upkeep on a home? Purchasing Florida Investment Property can relieve you of all those household chores but purchasing a Florida Investment Property requires you do some homework. You need to know what you are looking for in a Florida Investment Property. Minneapolis Warehouse Loft Downtown Minneapolis is rich with true metropolitan charm. With the growth of an incredible entertainment district, a wonderful artistic community, and all the opportunities of a large urban center, downtown Minneapolis is pleasantly thriving. Searching for CLUEs: What Homebuyers & Sellers Need to Know About Homeowners Insurance Homebuyers and sellers should be aware about issues involving homeowners insurance and the C.L. Real Estate Investing Deals That SkyRocket Your Net Worth 10-Fold Consider these parameters for a real estate deal:Property Value: $250,000 Purchase Price: $160,000 Repairs: $2,500If you analyze the numbers, you see that the equity available in this deal is $87,500 (Property Value minus Purchase Price minus Repairs).So here's a hypothetical question for you: Assuming that the information above is accurate, and the property is located in an area that you view as acceptable and/or favorable, then:If I offered to give you this deal in exchange for $10,000 in cash, would you do it?Remember - this is hypothetical. Hey Landlord! Is Your Lease Legal? The longer you are a landlord the more you strive to create the perfect lease/rental agreement. Landlords learn in the school of hard-knocks that some tenants are certified trouble makers and we try our best to protect ourselves with a carefully structured restrictive lease. The Sadness of Old Buildings From the book No Smooshing!For years, I've carried on a not-so-friendly debate with some of my artist friends from the West Coast about their ideas of what constitutes a good subject. We seem to be able to agree on certain things, like apples and oranges-and even certain landscapes. |
home | site map |
© 2006 TIGER MEDIA |