Business Valuation

Our Firm

We are entrepreneurs. Independent of WSPEG, our firms professionals have owned and operated more than 25 companies. We are realistic when evaluating businesses. We will provide candid feedback. We are specialists, not generalists. At WSPEG, we close transactions for our clients. We are independent. We have no conflicts of interest due to corporate initiatives to cross sell products and services to every client. We deliver results both nationally and internationally. WSPEG’s valuation team are veteran professionals – experts in the tangible and not so tangible nuances of business valuation.

Myth I: Valuing a private business should only be done when the business is ready to be sold or a lender requires a valuation as part of its due diligence process.

Fact I: Although the business sales and lending processes generally require that valuations be completed, if these events represent the first time an owner has a valuation completed, then you can be sure critical business and estate planning issues have not been addressed. If the business is to have a life beyond its current owners, then effective planning for ownership transition requires a regular valuation of the business.

Myth II: Business in my industry always sell for two times annual revenue (the revenue multiple). So why should I pay someone to value my business?
Fact II: The short answer is that data on selling prices indicate that revenue multiples within an industry are generally all over the lot. These rules of thumb by business brokers, the individuals who often facilitate private business transactions, are median multiple values. The median value indicates that half of the revenue multiples are below the median value and half are above. Thus, the median value is just a convenient midpoint and does not represent the revenue multiple for any actual transaction. Unless the firm that is being valued is truly a median firm, then using the industry rule of thumb for this purpose is clearly wrong.