dan55
Member
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- South Dakota
How would one come up with a value of a electrical contracting business. If their were partners and 1 wanted out. I would assume an accountant would have some input?
Business value
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BryanMD
Senior Member
Hire a divorce lawyer.
The tangible assets are the (relatively) easy part. Fair market value of a tool or truck or spool or wire is pretty straightforward even if the former partners are acrimonious.
The in-tangible assets are where the real fight will be. Hint: they are in almost all instances worth little more than diddly squat.
The tangible assets are the (relatively) easy part. Fair market value of a tool or truck or spool or wire is pretty straightforward even if the former partners are acrimonious.
The in-tangible assets are where the real fight will be. Hint: they are in almost all instances worth little more than diddly squat.
jimmyglen
Senior Member
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- St. Louis, Missouri
there was talk here about the value of accounts and lists of customers a while back - search the arcives
If I were you I would try to make a deal with the other guy where whoever cuts the candy bar - the other guy gets to pick what peice he wants
make a fair offer and be prepeared to accept either side of the deal
if you cant work it out yourselves then be prepared to spend a lot on attorneys
If I were you I would try to make a deal with the other guy where whoever cuts the candy bar - the other guy gets to pick what peice he wants
make a fair offer and be prepeared to accept either side of the deal
if you cant work it out yourselves then be prepared to spend a lot on attorneys
One way is to look at it as an investment. And, how this investment may stack up against other investments. Say you have $100,000, you would expect a $10,000 return on that $100,000 if invested in something that "promises" or is "expected" to return 10% on investment.
So if your business has a net profit (yearly) of $50,000 (return), what investment is that worth? At $100K, that's a deal. At $2M, this return you can get from a bank.
This will at least help you put it into perspective, just to see if it makes sense from an investment point of view.
Existing accounts should be considered for their impact on investment (good vs late payments) if not already factored into the net profit equation. And then there are assets or lack of assets, debts, and backlog which could change the value quite a bit.
You might ask a busines broker how he goes about valuing a business. A lawyer will want a hell of a lot of money just to kill the deal. And to make the deal happen, multiply by 3.
So if your business has a net profit (yearly) of $50,000 (return), what investment is that worth? At $100K, that's a deal. At $2M, this return you can get from a bank.
This will at least help you put it into perspective, just to see if it makes sense from an investment point of view.
Existing accounts should be considered for their impact on investment (good vs late payments) if not already factored into the net profit equation. And then there are assets or lack of assets, debts, and backlog which could change the value quite a bit.
You might ask a busines broker how he goes about valuing a business. A lawyer will want a hell of a lot of money just to kill the deal. And to make the deal happen, multiply by 3.
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