Myths Commonly Associated with Business Value (03/19/2008)
... Even if sales sputter and are off by a million or so per hour, there is still a whopping annual sales volume left over. According to my studies of recent years, it is estimated that 74% of small, closely held companies in America realize under $1 million of sales per year. Most of these businesses struggle year after year just to make ends meet. For the most part, in valuing small companies, I cannot subscribe to methods that project values based on future earnings for businesses that breathe a sigh of relief when just meeting last year’s sales! And I assure you, neither do most buyers. Bear in mind that regardless of what product, service, or entity we sell, ultimately it is the consumer who will decide whether we survive or fold....

Business Brokers as Business Valuators (03/19/2008)
... Thus, as we dip down on the scale of productivity, we tend to find individuals who exhibit broader-based ambitions and even multiple skills. Larger companies tend to select their sales management from these ranks. They know about selling, plus they tend to possess ambitions for higher management. Consequently, they more readily accept paperwork, analysis, budgeting, and supervisory responsibilities that go along with any administrative job. Business brokerage is principally a selling field....

Bankers, Accountants, and Lawyers as Business Valuators (03/19/2008)
... However, commercial bankers, because of the multiplicity in applicants and the frequency in reviews, can normally supply a resourceful commentary to the end products of estimated values. Accountants The traditional form of training that accountants receive makes them most proficient in the scientific elements of business valuation. However, their training is also traditionally void of marketing research and studies in human enterprise (psychology). Generally missing from their everyday practices are ‘‘repeating impressions’’ of the vital influences that buyers bring to bear on the equation of value in closely held enterprise. Thus the general practitioner tends only to scientifically measure the value of hard assets in light of cash flows....