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 signing a deed of sale or purchase of a business, the seller must request an objective valuation of the business.objective valuation of the businessThis must include a valuation of the tangible and intangible elements transferred to the buyer.
Setting the price fairly avoids tax disputes and other legal proceedings.
The valuation of the business is therefore divided into tangible and intangible elements.
The tangible elements of the business are further 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 on the basis of its net book value.
However, if the net book value is nil or virtually nil, the tooling must be valued on the basis of its 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 valuation of your business within 3 days:
confidential / fast / personalized
How to value current assets?
Current items include merchandise stockwhich must be valued separately from tools.
When valuing goodwill, the following factors are taken into account the size of the stock and its turnover.
The size of the stock must be determined in relation to a normal quantity for the operator's business.
If the merchandise is difficult to sell, the 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?
Valuation based on intangible elements covers customers, leasehold rights, brand names, patents, trade names and trademarks.
We will divide these elements into 3 here: the lease, customers and 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 methodalso known as the rent saving method.
This method consists in calculating calculating the difference between the capped rent that would have been paid had the lease been renewed under the same conditions and the rent that would have to be paid today at market price for an equivalent location.
Once this difference has been calculated, we apply a location coefficient based on a number of factors, including the quality of the environment and the marketability of the area.
The minimum value of the goodwill 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 valuation of your business within 3 days:
confidential / fast / personalized
How can I evaluate my clientele from my turnover?
A very commonly used method, sales evaluation is based on the company's balance sheet over the last 3 years. Once this data has been collected, an annual average is established, to which a maximum and minimum percentage are applied.
The 2 figures obtained constitute a range enabling the business to be valued with relative precision.
Example 1: taking into account the last 3 years, a restaurant has average annual sales of €300,000. In the restaurant sector, the ceiling and floor percentages are set at 40% and 120% of sales respectively. Taking this information into account, 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 valuation method is widely used for businesses with high returns, at least high enough to generate a manager's salary, a substantial net profit and dividends.
To carry out this type of business valuation, you need to focus on the company's accounting results; this allows you to quantify the manager's income, but also the presence of depreciation charges or loan interest charges.
In this way, it is possible to highlight not only sales figures, but also the profit actually generated by the business.
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 trade namenormally valued on a global basis.
Next, we need to consider patents and other trademarks with a separate valuation.
This can be done using 3 different methods:
- 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 valuation of your business within 3 days:
confidential / fast / personalized
evaluate your business
Confidential | Fast | Individualized
600 within 3 days*.
*Fonds de commerce avec un CA<1M€, au-delà sur devis
THEY TRUSTED US
More than 30 business valuations performed each month.
"A quick contact"
"Accurate and detailed"
"A great help."
Frequently Asked Questions
LEARN MORE ABOUT OUR EVALUATION SERVICE
The XVAL consultant will sign any confidentiality agreement required for your valuation.
In the absence of any information from you, XVAL consultants apply strict confidentiality to all information transmitted for the valuation 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.