Valuation Challenges With $10 Million-and-Under Businesses

Avoiding Mistakes With Built-In Gains and Taxes, Misuse of Market Data and Other Small Business Complexities

Recording of a 110-minute CPE webinar with Q&A

Conducted on Thursday, August 8, 2013

Recorded event now available

or call 1-800-926-7926
Program Materials

This teleconference will explore the challenges that frequently arise for advisors in providing a valuation of a smaller business ($10 million and under in revenues). The panel will address common traps such as valuation methodology, built-in gains and taxes, proper adjustment to accounting records, and considering current market conditions.

Description

When it comes to accurate valuations of so-called small businesses (under $10M in revenue) for sale, financing, inheritance, litigation, etc., even experienced valuation professionals face unique and complex challenges—even more so than with higher grossing companies.

Working with small business valuations, advisors most often stumble by using an incorrect valuation methodology, incorrectly applying built-in gains and taxes, making an improper adjustment to accounting records, or not considering all current market conditions, to name a few pitfalls.

An advisor's accuracy in small business valuations is essential in a broad range of engagements, not just in sales transactions but also for estate and gift tax planning and divorce settlements.

Listen as our panelists explore the challenges that most frequently arise during valuations of small businesses.

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Outline

  1. Reasons for valuation
    1. Sale of a business
    2. Purchase
    3. Estate planning
    4. Divorce
    5. Succession planning
  2. Common mistakes
    1. Choosing the wrong type of business value
    2. Using the wrong valuation multiples
    3. Using an incorrect valuation method
    4. Improper adjustment to accounting records
    5. Assuming that every established business has positive business goodwill
    6. Leaving out key assets and liabilities from business valuation
    7. Failing to assess your company-specific risk.
  3. Remedies to mistakes

Benefits

The panel will offer perspectives on issues such as:

  • Correctly applying built-in gains and taxes.
  • Avoiding misapplication of market data when finding comparables.
  • Making accurate adjustments to earnings or normalization.
  • Assessing company-specific risk.

Following the speaker presentations, you'll have an opportunity to get answers to your specific questions during the interactive Q&A.

Faculty

David Coffman, CPA
David Coffman, CPA
President & CEO
N.J. Business Valuations

He is a CPA, accredited and certified in Business Valuation, who has valued hundreds of small businesses since...  |  Read More

Troy C. Patton, CPA/ABV
Troy C. Patton, CPA/ABV
Managing Partner
Patton & Associates

He provides expert witness testimony on business valuation issues, company purchases, company sales and divorces. He...  |  Read More

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