Sun Services:

Valuation Enhancement - Your Business Valuations and Appraisals Provider

Do I maximize value and minimize risk by continuing to own the business or by selling out? When and how do I sell to get the best price, and how do I determine this?

Most people have a clear objective when they invest in publicly traded securities: they want to earn a return, either in dividends or capital appreciation. This clarity of purpose, however, frequently disappears when investments are made in closely held companies. And this is why many such businesses are under performing. The following is a list of fundamental questions that every shareholder and executive in a closely held company should be able to answer, but seldom can:

• What is my real cash return on my investment in my private company?
• Is my "investment" the amount that was originally invested or what it is worth now?
• What rate of return should my investment yield, given its risk?
• How do I determine what the business and my investment in it are worth now?
• How does minority ownership status affect the value and liquidity of an investment?
• What are the most likely future prospects for the business and what factors most threaten it?
• What is the best strategy to build value in the business?
• How do I manage the goal of ownership succession--transferring stock--against management succession--running the company, if my preferred successors are not ready?

Value Enhancement Diagnostic Analysis

The value of a business is largely driven by a company’s pre-tax EBITDA (Earnings before interest, taxes, depreciation and amortization), also known as adjusted earnings. However, there are many intangibles that also play a large part in determining business value. Recognizing and enhancing these intangible factors in advance, can increase the value of the company. Drawing upon our experience in the marketplace, Sun Business Valuations has developed a diagnostic questionnaire to enable business owners to identify potential areas to improve in advance of selling their company. This analysis focuses on management, human relations, sales, marketing, operations and finance. There are 22 diagnostic questions and related action items that will help a business owner to recognize deficiencies and take pro-active steps to enhance value as well as a scorecard that will help you take stock as to how your company ranks in these key value enhancement areas.