How are Carson City, NV Businesses Valued?

Have you ever assessed the value of your Carson City business? There are a number of intricate details that you have to evaluate in order to find your business’ fair market value. The value of a business might change depending on who you ask, but luckily there are certain consistent principles applied to any business valuation that is performed. This might seem complicated, but we can help. Our experts at Redwood Valuation Partners have years of experience in business valuation and are eager to help you through the process from start to finish.

409a Business Valuation Services in Carson City

Call Redwood Valuation Partners for your next business valuation (206) 660-1295

Why Get Your Carson City Business Valued?

A business valuation could be conducted for several reasons, but often it is done because a business’s owner wants to know how much the company is worth. If you are considering selling your business, it’s critical to get a valuation first so that you can go into negotiations with potential buyers armed with knowledge and data.

A business valuation can also help show you where your business’ value comes from. Teasing out all the reasons a business is valuable is complicated, though. It might be surprising to learn that a business with a very high value in Carson City is perhaps not as highly valued in a different city. By the same token, hidden value may lurk in a business that doesn’t seem as impressive at first glance. It comes down to the details.

It’s imperative, then, that your business valuation is handled by professionals. Getting your business valued requires knowledge of finance, tax law, venture capital and the audit process, as well as of your business. The advantages of doing a business valuation correctly include understanding your selling price and stock compensation. However, any advantages of doing a valuation are up to you and your business. We at Redwood offer a free consultation for clients who need advice getting started with a business valuation.

Different Ways of Approaching Business Valuation

When assessing the value of any business, there are three broad approaches that are considered standard. These three approaches are not the only possible ways of looking at a business’s value, however. These approaches to business valuation are applicable whether your business is located in Carson City or not. Each business has its own particulars that will ultimately determine the approach that is the most appropriate for it.

Asset-Based Approach

There are several asset-based approaches possible for business valuation. The aim of an asset-based approach is to total the investments of a business. An accountant going forward with an asset-based mindset is theoretically attempting to imagine what it would cost to set up another, identical business. This exercise can reveal a lot of information about a business, including its liabilities and assets. Then, the valuator can simply subtract the liabilities from the assets to figure out the worth of the business.

It sounds straightforward, but there are hidden complexities. In practice, determining which assets and liabilities to include, and how, is a tricky process. A going concern asset-based approach or a liquidation asset-based approach will help you move forward with this appraisal.

One method is to look at assets with a going concern. Simply put, the accountant can subtract the value of any liabilities from the assets that the business has. In a liquidiation focused approach to valuation, it is important to imagine the business is liquidated before determining its value. After a real liquidation, the business would receive cash; this now becomes the business’s value in a valuation.

The specifics of your business may reveal whether this sort of approach is right for you. It is possible that a different method is more suitable for your particular business. There are certainly some businesses, such as those that are in a sole proprietorship, that would be well-advised to take a different approach. A corporation, however, could find value in an assessment that is asset-based, as its assets are owned by the entire company and not one person.

Market-Based Approach

It can be useful in a valuation to look at the bigger picture and see what a business is worth compared to the rest of the market. For example, you could compare your business to others located in Carson City. The goal is to see what your business would be worth by comparing it to other similar businesses.

An approach that is concerned with the market as a whole takes a much more detailed view of factors outside of just the details of your business’s finances. In this approach, it is also very important to consider what a buyer in the market would currently pay for your business and what the fair market value would be.

It would be great if the sort of information necessary for this approach was easy to obtain, but it is not always the case that competing businesses will divulge the necessary figures. Private and protected information such as non-competition clauses can prove a barrier to obtaining some of the information needed to make a valuation.

Making a Valuation Based on Income or Earnings

This approach to business valuation looks at potential and future value in order to draw conclusions. However, this method starts in the present, looking at the earnings of the business today to try to predict its future earnings.

It is not an exact science to predict the future of a business and therefore an earning focused approach can invite an element of risk. However, they can use hard data to back up this prediction. The accountant doing the valuation can even “normalize” figures to remove unusual spikes or dips that could make the assessment less precise. Sometimes, these predictions are divided by capitalization factors that fluctuate based on the market.

Again, sole proprietorship and the exact style of business can impact the ultimate valuation here. If a business is strongly linked with its owner and that owner sells or leaves the business, an evaluation based on past performance could lose its validity depending on how customers react to the change.

Different Kinds of Business Valuations

The types of valuations possible go beyond those meant strictly for businesses trying to sell. There are other value assessments that serve difficult purposes. Someone with a patent, for example, may also seek a valuation of their property.

Getting a 409A Valuation

A 409A valuation looks at stock as it relates to the value of your business. It is common for employees in many fields to receive stocks as compensation. Stocks given to employees are regarded by the IRS as deferred income �” income given to someone in one year but actually paid in a different year.

This sounds complicated. Ultimately, it is a matter of reporting stock earnings. A benefit of this form of business valuation is that it can determine a company’s fair market value. Fair market value is especially important here because employees with stock need to be able to sell it at or above that mark. In addition to stock, a 409A valuation is required if your company issues bonus plans, salary deferral arrangements and other agreements involving deferred compensation for employees.

Often, you will know you need this type of valuation because it will be legally required of your business. And if you’ve already gotten a 409A valuation, ensure you are getting re-evaluated once a year and/or any time your company closes a new funding round, in accordance with the law.

It is advised that you don’t try to do a 409A valuation yourself, even though you can, and instead let an accountant deal with unforeseen difficulties that you aren’t prepared to handle. Experience and expertise are key benefits that only an accountant can offer if you have to work through a 409A valuation.

Valuations for Businesses

Whether you’re negotiating a transaction, planning your business or estate, or involved in entity conversations, business valuations cover a wide range of situations and companies. Maybe you are wondering how much your business can sell for right now. Or you might be hoping to assess your tax liability by looking at your business’ value.

Whatever the reason, a skilled valuator can help you get equity and enterprise valuations. At Redwood, we’ve seen our clients’ needs expand as our own business has expanded. We years of experience and a comprehensive team, we are prepared to take on a host of business valuations needs. Perhaps you want to ensure compliance with tax reporting or, conversely, find the fair market value of your business.

The intimate details of IRS regulations, business and finance can be a complex maze to try to sort through. You know your business, but evaluating your business against all applicable laws, regulations and financial considerations takes an expert in the field of business valuation.

How to Assess IP and Patents

Intellectual property and patents have separate valuation concerns. Patent and IP valuations come from many different industries in the business world. Some of our clients have concerns about trademarks and trade secrets, while others want to make sure they stay in compliance with taxes. Litigation, mergers, acquisitions and business planning provide additional cause for an IP and patent valuation.

Make sure your patent or intellectual property is protected by understanding what it’s worth on the market. These assets can be difficult to appraise as they are often intangible and difficult to define. But the value of IP and patents cannot be understated, especially in recent times when so much of a business’s value comes from these assets in particular.

Purchase Price Allocations (ASC 805)

Purchase price allocations, or ASC 805, may be necessary for your business. In the course of negotiations for a business acquisition, things such as liabilities, assets and fair market value need to be assessed objectively. Of course, the overall goal is to figure out the purchase price for an acquisition.

The goal of a purchase price allocation is to tease apart the pieces of a business, such as liabilities and assets, to find its fair market value. It is not always the case that a business is sold as one whole entity; it may be sold in smaller pieces.

What’s the Bottom Line?

At Redwood Valuation Partners, we are experts in business valuation. Ensure that your Carson City business meets the requirements of the tax code and applicable regulations while finding the value of the assets, liabilities and intellectual property you hold.

Often, you will need to know the fair market value of your business. Whether you are looking to assess your value for the sake of selling or have yearly tax considerations, a business valuation will help. Intellectual property can be assessed and protected through a business valuation. Assets and liabilities are complicated. Get experts on your side who know how to cut through the complicated legal language to get you the information you need. Our team has worked for years in business, finance and tax issues, allowing us to meet the needs of a wide range of businesses.

We understand the ins and outs of venture capital and auditing and take a teamwork-focused approach. Our valuation associates and analysts have worked in their field for years, becoming respected experts. We understand that many of our clients come from high-pressure startups and growth-focused companies with tight deadlines. We value your time; let us minimize the burden of complicated valuation details while you focus on what you know best �” your business.

Whether you want a valuation for selling, taxes or any other reason, we can promise client focus and years of experience when working alongside you. We go beyond the standard valuation to offer a free consultation, as well as audit defense and customized reports. If you aren’t sure where to start, we can guide you through the process right from the start. And our customized reports will include all the detail you need to make business decisions based on your valuation. See both subjective and objective elements of your valuation with an in-depth look at your business. And if an audit should come up, you can rest easy knowing our audit defense has your back at any time.

If you do want to find the value of your business or assets, having skilled assistance can be a boon. Don’t try to tackle this task alone when Redwood is ready and able to help you with the process. Find out how to get started with a consultation.

Client-Focus

Our clients have direct access to Redwood’s managing partners and directors. You know your business better than anyone, and the valuation process includes subjective assessments that require your input. We guide you through this process, save your time, and allow you to focus on what matters – growing your business. Get a quality company appraisal in Carson City, NV.

Services

The Redwood team has performed many IRC 409A Valuation Seattle engagements, and we offer a wide variety of business appraisals to Seattle. Other services include ASC 805 valuation (purchase price allocations), IP valuation, patent valuation, impairment valuation, carried interest valuation, portfolio valuations, IRC 382 valuations, and many other types of stock valuations and business valuations.

Experience

With over 50 years of combined valuation experience, we provide top-tier expertise and client service at a reasonable price. Our experience as CFOs and Controllers of venture firms and startups separates us from our competitors who lack the boots-on-the-ground experience that our clients have, which we also share.

Contact Us

If you plan to issue stock options in the next twelve months or have any questions about potential valuations, give us a call for a free consultation and we will give you candid advice about whether a valuation may be needed and how we might help. Our goal is to help our clients achieve their desired goals with minimal burden.

Carson City Nevada business valuation services

409A Valuation Carson City

Redwood Valuation Partners was formed behind an idea of service positioning us as one of the most well respected companies in the industry. Our expert knowledge of finance, tax, venture capital and the audit process helps us understand the difficulties of start-ups. We speak your language! Give us a call and learn how we can help. For information on Business Valuations follow us on Twitter Like us on Facebook and find us on Google+ too! (206) 660-1295

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