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Business Valuation for Houston and Texas Businesses

Business Valuations are frequently required for Business Acquisitions, Buy-Sell Agreements, Commercial Litigation, Divorce Negotiations, Estate Planning, Insurance Claims, Partnership Dissolution, Limited Partnership Transfers, and Minority Shareholder Disputes.

If you require a Business Valuation, we can help. Call Us at 713-661-1040.

Business Valuation Topics:

Types of Business Valuations
Cost of Business Valuations
What is Fair Market Value in a Business Valuation
Business Valuation Methodologies
Going Concern Valuation Summary
Going Concern Value – Income Approach
Going Concern Value – Asset Based Approach
Going Concern Value – Market Approach.
Liquidation Value
Small Business Valuation

Types of Business Valuations

Business Valuations can be done as either a Calculation Engagement or as a Valuation Engagement. The level of effort, and therefore cost, will vary depending on the engagement type selected.

Calculation Engagement:

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Valuation Engagement:

ForensicAccountingHouston.com - Business Valuation is frequently required for Business Acquisition, Buy-Sell Agreement, Commercial Litigation, Divorce Negotiation. Free Consult with Forensic Accountant Jim Trippon Call 713-661-1040. small business valuation, business valuation method, business valuation firms, business appraisals, business valuation appraisal, business valuation methods, small business valuations, business valuation techniques, valuation of company, company private valuation, small business value, business valuation divorceIn a valuation engagement the valuation analyst (sometimes called the appraiser) has the freedom to explore multiple approaches to valuation and to apply those particular valuation methods and approaches the valuation analyst deems most appropriate for the circumstances. This is generally a much more time consuming (and therefore expensive) process; and it is generally viewed to be a more accurate determination of value.

Cost of Business Valuations

Business valuations can vary greatly in cost depending on complexity and amount of assets that comprise the “subject interest” or business be valued. Likewise the choice between performing a calculation engagement or valuation engagement, the accessibility of records, and the type of report to be issued will greatly influence the cost of appraisal.

Although every business valuation will be different, basic level calculation engagements or limited partnership valuation engagements appraisals will typically cost between $3,000 to $10,000; whereas full scale valuation engagements frequently cost between $7,500 to $35,000.

One word of caution. Always beware of a “low cost” appraisal or “bargain basement” appraiser. Many people have learned the hard way that cutting corners on a business valuation can cost them the outcome their litigation when a Court rejects a slipshod valuation, or it fails to stand up under IRS scrutiny, or courtroom cross examination.

What is the definition of Fair Market Value in a Business Valuation

The most commonly used definition of fair market value used in business appraisals is located in Revenue Ruling 59- 60. This revenue ruling defines fair market value as

“….the price at which the property would change hands between a willing buyer and a willing seller when the former is not under any compulsion to buy and the latter is not under any compulsion to sell, both parties having reasonable knowledge of relevant facts, which is best described as what would a willing buyer pay, and what would a willing seller accept, neither acting under duress for a sale of the business.”

Business Valuation Formula

Generally a Business Valuation seeks to determine the Fair Market Value of the “Subject interest” which is either an entire Business, or a portion of, or fractional ownership interest in, a Business.

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