Don't Drink the Kool-Aid - Get An Arms-Length Valuation


One critical flaw that key executives and business owners make is, not knowing the business fair market value. Fair market value is defined by the international business glossary as: The price, expressed in terms of cash equivalents, at which propert

New Jersey (I-Newswire) February 6, 2014 - One critical flaw that key executives and business owners make is, not knowing the business fair market value. Fair market value is defined by the international business glossary as: The price, expressed in terms of cash equivalents, at which property would change hands between a hypothetical willing and able buyer and a hypothetical willing and able seller, acting at arm's length in an open and unrestricted market, when neither is under compulsion to buy or sell and when both have reasonable knowledge of the relevant facts.

Quite often ignored or miscalculated, this error in judgment creates a false sense of direction. We can all agree that personal financial decisions should be based on knowledge of your particular position. Knowing your business value is no different than your personal financial dashboard, i.e. one's 401K's value or overall net worth.

Most businesses tend to be highly illiquid and leave an executive in a very vulnerable position when it comes to leverage. From a deal making stand point, sellers quite often see their business at the high end of a valuation calculation. Buyers vice-versa on the low side. In actuality, business owner's forward decision making should be made based on the lowest value. Owner's should operate under a worst case scenario, as if they would need to sell their business at any given time. But of course, most owners operate at their maximum value scenario. This exposes the business to downside risk in the market and allows for faulty decision making in the process. A simple third party valuation gives an executive an arms - length view of their position. Essentially, a quality, prepared Third Party Fair Market Valuation by someone who does not drink the kool-aid .

Once the executive obtains this valuation, future decisions come with greater clarity. It is like any other value determination, high level decision making needs the proper analysis. Knowledge of their position allows executives to see how their worth is calculated. This allows them to focus on particular areas where they may be stronger or weaker, for example, the valuation report might show that the business is underpriced, in comparison to their competitors. Therefore, they have more room to maximize their price point and increase their value. The findings may also show the areas of strength and weaknesses, allowing for a adjustments in strategy to maximize value.

Rewarding moments come with effort. The person in charge of the Kool- Aid process, most certainly is drinking it as well. At A. Neumann & Associates, LLC, we see ascending buy side transactions occur when there is a comfortable assessment of the business to be purchased. Buyers want to feel confident that the different valuation methods reach the same conclusion. Valuations that are in-line, with the various valuing approaches, carry a lower risk grade on the buyer's investment. With a third party FMV valuation, a business owner can lead the business down the right path and maximize shareholders value.

Successful transfers of businesses come from an honest assessment of the business. Executives who know their true position make better decisions on company strategy - all at relative little cost to obtain a Fair Market Valuation and often with significant returns. At A. Neumann & Associates, we find these executives to be the foundation of our success.

For more information on obtaining the proper Fair Market Valuation please contact A. Neumann & Associates, LLC.






About A Neumann & Associates LLC

A Neumann & Associates, LLC is a professional merger & acquisition and business brokerage firm with    More..30 years of experience in New Jersey, New York, Pennsylvania, Delaware and Maryland that assists business owners and buyers with the business transfer process in a completely confidential manner. The company is affiliated with BBN, with 450 offices and access to a national network of qualified buyers and sellers. For more information, please contact A Neumann & Associates at 732-872-6777.Less..

Contact Information

A Neumann & Associates LLC
Eileen Zengel
84 First Avenue - Postal Box 500
Atlantic Highlands, New Jersey
07716
Phone : (732) 872-6777

Published in:

Business > Finance

Published On:

February 6, 2014

Print Release:

Print Release

If you have questions regarding information in this press release contact the company listed above. I-Newswire.com is a press release service and not the author of this press release.The information that is on or available through this site is for informational purposes only and speaks only as of the particular date or dates of that information. As some companies and PR Agencies submit their press releases once per week,month or quarter, make sure to check the official company website for accurate release dates as our site displays the I-Newswire.com press release distribution date only.We do not guarantee the accuracy or completeness of information on or available through this site, and we are not responsible for or omissions in that information or for actions taken in reliance on that information.


Related Releases

Project Management Courses: Boosting Your Work Productivity
Professionals who want to get better job opportunities should take into account taking up project management courses. This will undoubtedly boost your performance, and help you get a greater position.

Irvine Pacific Debuts Two New Neighborhoods This Weekend In Cypress Village
April 26 Grand Opening of Jasmine, Laurel Neighborhoods, "Single-Family Homes Perfect for Growing Families", Village Part of Highly Acclaimed Irvine Unified School District, Close To Employment, Shopping, Dining and Resort-Style Amenities

Meet Andrew the Newest Member of the Phil Jawny Group in Raleigh, NC
The Phil Jawny Mortgage Group located in Raleigh, NC is proud to have the newest member, Andrew Kornowski aboard in the position of Mortgage Team Manager.

PBS Is Out of the Blocks
PBS is out of the blocks with its new rebrand now offers complete marketing communication, printing and promotional products that allow for improved brand management, increase efficiencies, and reduce costs.

Australian Government's Frustration on RBA Stance 'risks Central Bank's Independence' States Alocoveritas' Earl Reginald Stevenson
"The question here is not should rates be lower or higher, but is it worth the risk of impugning the independence of the Reserve Bank," said Alcoveritas' Senior Managing Partner, Earl Reginald Stevenson in Sydney, Australia.