Valuation of a business
How to value a business ? Which valuation method for a business ?
Each evaluation is conducted by an expert in the evaluation of your industry:
- Goodwill food (butcher's shop, bakery, delicatessen, greengrocer, etc.)
- Commercial property hotelbusiness, goodwill restaurant
- Goodwill bookstore
- Goodwill services (dry cleaner, real estate agency etc)
3 to 5 valuation methods will be used to determine the value of the business and will be detailed in the appraisal report which will be produced at the end of the valuation.
The solution to evaluate a business very simply is to rely on the report presenting the value of the business for :
- Evaluate the business to sell it, transmit it.
- Evaluate your business to negotiate financing.
- Track the value of a business over time.
What are the different elements to consider in the valuation of a business?
Before concluding a deed of sale or acquisition of a business, the seller must request an objectiveobjective valuation of his businessThis must include the valuation of the tangible and intangible elements transmitted to the buyer.
Setting the price fairly avoids tax disputes and other procedures.
The valuation of the business is therefore divided into tangible and intangible elements.
The tangible elements of the business are divided into fixed assets and current assets.
How to evaluate the fixed assets of the business?
Fixed assets include tools and other equipment. The value of this equipment is estimated from the net book value.
However, if the net book value is nil or almost nil, the tools must be valued from the market value. The latter is determined by the market, in the same way as the "argus" is for a car.
VALUATION OF YOUR BUSINESS
WITHIN 3 DAYS - €600 HT *
Personalized study within 3 days
By a consultant specialized in your sector of activity, mastering the parameters of your activity, your market, your business.
Several evaluation methods
Our consultant will use several methods to allow you to determine a price range for the business, consistent with the current market situation.
Confidential and personalized
For each business valuation, the XVAL consultant will contact you in complete confidentiality for 2 meetings: framing of the valuation and a detailed restitution of the results.
Xval Valuation
Order a company evaluation (secure payment by STRIPE)
MAKE AN APPOINTMENT WITH A CONSULTANT?
Get a detailed evaluation of your business within 3 days:
confidential / fast / personalized
How to value current assets?
The current elements qualify the stock of goodswhich must be valued separately from the tools.
When valuing goodwill, one takes into account the size of the stock and its disposal.
The size of the stock must be determined in relation to a normal quantity according to the activity of the operator.
If the disposal of the goods is difficult, this valuation must be discounted. This is particularly the case for goods that have been stored for an abnormally long time.
Finally, the discount must be determined according to the nature of the storage and its duration.
What are intangible elements?
The valuation based on the intangible elements covers the clientele, the right to lease, the sign, the patents, the trade name or the trademarks.
We will divide these elements in 3: the lease, the clientele and the other elements.
How to evaluate the leasehold rights of a business ?
Various methods exist to correctly value the leasehold rights of a business.
The most commonly used method is the differential methodwhich is also called the rent savings method.
This method consists of calculating the difference between the capped rent that would have been paid if the lease had been renewed under the same conditions and the rent that would be paid today at market rates for an equivalent space.
Once this difference is calculated, a location factor based on several factors, including the quality of the environment and the marketability of the area.
The minimum value of the business must be at least equal to the value of the lease.
What are the methods for evaluating the clientele of a business?
In order to evaluate the clientele, there are mainly 2 methods: the turnover method and the profitability method.
VALUATION OF YOUR BUSINESS
WITHIN 3 DAYS - €600 HT *
Personalized study within 3 days
By a consultant specialized in your sector of activity, mastering the parameters of your activity, your market, your business.
Several evaluation methods
Our consultant will use several methods to allow you to determine a price range for the business, consistent with the current market situation.
Confidential and personalized
For each business valuation, the XVAL consultant will contact you in complete confidentiality for 2 meetings: framing of the valuation and a detailed restitution of the results.
Xval Valuation
Order a company evaluation (secure payment by STRIPE)
MAKE AN APPOINTMENT WITH A CONSULTANT?
Get a detailed evaluation of your business within 3 days:
confidential / fast / personalized
How can I evaluate my clientele from my turnover?
Very commonly used method, the evaluation of the turnover is based on the balance sheet of the company over the last 3 years. Once these data are gathered, an annual average is established, to which a maximum and a minimum percentage are applied.
The two figures obtained constitute a range allowing to evaluate the business in a relatively precise way.
Example 1: Taking into account the last 3 years, a restaurant has an average turnover of €300,000 per year. In the restaurant sector, the ceiling and floor percentages are respectively set at 40 and 120% of the turnover. Taking into account this information, we obtain the following range for the valuation of the business:
300 000 € x 40% = 120 000 €
300 000 € x 120% = 360 000 €
How do I value my business through profitability?
This method of valuation is very common for businesses with high returns, at least high enough to generate a manager's salary, a substantial net result and dividends.
In order to make this type of valuation of the business, it is necessary to focus on the accounting results of the business; one can thus quantify the manager's income but also the presence of depreciation charges or interest charges on loans.
In this way, not only the turnover, but also the actual profit made by the company can be put forward.
In order to determine the final value of the business, the profit figure is taken and multiplied by a coefficient.
What are the other intangible elements of goodwill?
Finally, there are intangible elements distinct from the customer base and the lease.
These elements include the trade name and the signnormally valued on a global basis.
Next, one must deal with the patents and other trademarks with a separate valuation.
There are 3 different methods to do this:
- The capitalization of profits generated by patents and trademarks ;
- The accumulation of research costs if they are not exploited ;
- In case the trademark/patent has been exploited: the capitalization of license fees.
In order to proceed to the valuation of your business in a fast, confidential and individualized way, you can contact an expert consultant XVAL via the form below.
VALUATION OF YOUR BUSINESS
WITHIN 3 DAYS - €600 HT *
Personalized study within 3 days
By a consultant specialized in your sector of activity, mastering the parameters of your activity, your market, your business.
Several evaluation methods
Our consultant will use several methods to allow you to determine a price range for the business, consistent with the current market situation.
Confidential and personalized
For each business valuation, the XVAL consultant will contact you in complete confidentiality for 2 meetings: framing of the valuation and a detailed restitution of the results.
Xval Valuation
Order a company evaluation (secure payment by STRIPE)
MAKE AN APPOINTMENT WITH A CONSULTANT?
Get a detailed evaluation of your business within 3 days:
confidential / fast / personalized
evaluate your business
Confidential | Fast | Individualized
600 within 3 days*.
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Frequently Asked Questions
LEARN MORE ABOUT OUR EVALUATION SERVICE
The XVAL consultant will sign any confidentiality agreement required for your valuation.
Without information from you, XVAL consultants apply strict confidentiality on all information transmitted for the evaluation of your business.
For each valuation ordered, adetailed report is sent to the client presenting the valuation methods used (assets, profitability, DCF, etc.) to estimate the value of the company, and any adjustments made.
For each method, the valuation elements used are detailed and explained.
Each consultant is specialized in a specific sector of activity, which allows him to perfectly master the customs and practices of valuation specific to each business.
To launch an evaluation of a business, you just have to send us the main documents of your business to be evaluated by email: support@xval.fr and to proceed to the payment of the valuation study.
To pay, you just have to click on the button below (secure payment by stripe) or to make a transfer on the RIB transmitted by the XVAL consultant.
During your meeting with the XVAL consultant, he will give you the list of documents necessary for the evaluation according to your sector. In bold, the essential documents to launch the first analyses.
Legal documents
- K or Kbis extract (if available).
- Articles of Association.
- Minutes of the last general meeting.
- Auditors' report for SA and SAS. (if applicable)
 Financial documents
- Balance sheets and income statements for the last 3 years.
- Detailed analysis of the turnover over the last 3 or 5 years:
- breakdown of sales by customer and by product/service
- billing method (rate, payment method, etc.)
- of major customers
- Remuneration, expenses, benefits in kind and billings of the transferor(s) and his/her family.
- List of loans - schedule. (if applicable)
- List of leasing contracts - schedule. (if applicable)
Operating documents
- Commercial lease
- Miscellaneous contracts :
- general terms and conditions of sale (GTC),
- employment contracts,
- insurance policies,
- commercial contracts,
- concessions or operating licenses,
- lease management contract.
- Title deeds to the company's real estate. (if applicable)
- Participations held. (if applicable)
- Industrial property rights (patents, licenses, trademarks). (if applicable)
- Administrative authorization or license (patents, licenses, trademarks). (if it is a regulated activity)
- Personnel status: organization chart, seniority, remuneration, age pyramid, non-competition clauses in employment contracts, etc.
- State of the main equipment in case of value (list, date of acquisition, condition, etc.).
- Product/service catalog and prices.
- List of pending litigation or lawsuits.
XVAL is a brand of "WEXLINKS", a limited liability company with share capital of 100,000 EUR based in Annecy, France, specializing in support for business leaders in the following areas:
- valuation,
- advice on financing,
- fundraising,
- transfer of shares.
www.WEXLINKS.fr is involved throughout France in assisting business owners with the transfer of their businesses.
