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Increasingly, funds are being invested in businesses with a view to resale / purchase or merger with other organizations for profit. And then the question arises: “How to evaluate the value of a business, taking into account all investments?”.

Express assessment “on the knee”. If you have a simple business and need a valuation, then calculate as follows: “profit for 1 - 2 years + property” and sell.

Cost types

First of all, let's deal with the types of business valuation. Different classifications give us different types cost, but I decided to stop at the basic ones. By the way, each of the types has its own purpose and objectives for business valuation, then you will understand why this is necessary.

I also want to note that these types of valuation relate to existing businesses.

1. Market

The price of selling/purchasing a business under conditions of market competition.

The market value will be the price of all the property of the organization, taking into account the income that can be received in the future.

This value of the business is determined when it is necessary to find out the place of the organization in the market for M&A transactions (mergers or acquisitions), business sales or long-term development adjustments.

Determining the market value in business valuation is based on in-depth analysis and cash flows.

Example (simple)

Let's analyze the market value of a business using the example of Romashka OJSC. The founder wants to adjust the development strategy. And for this he makes the following table:

We see that the price of the business has increased by 320,000 rubles over the year, which indicates the positive growth rates of Romashka OJSC, the business is going uphill.

2. Investment

The value of the property for specific investment purposes.

It is calculated when business owners decide to launch investment projects. Or the organization is considered by investors for investment.

Depending on the projected return on investment, the cost of this type can be either higher than the market value or lower.

Example (simple)

JSC "Romashka" is planning a strategic partnership with JSC "Oblachko". The partnership is considered as an investment project.

In this case, to evaluate the business, it is necessary to determine the investment value of the partnership, for this we will predict the benefits that we can get from a merger with another company.

The investment value of the business in the implementation of the partnership project in 5 years will be 11,756,723 rubles, which is beneficial for Romashka OJSC. This example with calculations is considered in more detail below, in paragraph.

3. Recovery (current)

The sum of all costs of establishing and operating a business, including assets.

It is necessary when the top management of the organization made a decision on property insurance, also if the founders decided to revalue the assets. And yet - when it is necessary to optimize the existing taxation system.

Example (simple)

The management of OJSC "Romashka" considers it necessary to insure the business against risks, while the opening of the business was 5 years ago. In this case, assets are revalued for insurance and the replacement value of the business is determined.

During this time, fixed assets (equipment, real estate) have fallen significantly in value, reflecting the replacement cost of the business.

The revaluation of equipment and real estate in 2018 led to a decrease in the value of the business, compared to 2013, by 700,000 rubles.

4. Liquidation

The value of the business in monetary terms minus all costs associated with its sale.

Such a cost estimate is needed when, due to unforeseen circumstances, it is necessary to close the business as soon as possible.

It is important to remember that with an emergency sale of a product, its value becomes lower than the market value, and the same is true with the sale of a business.

Example (simple)

OJSC "Romashka" is closed due to the high market. In this case, according to the latest reporting, the price of the entire property is determined.

All debts to counterparties and partners, payments to employees, payment of commission to realtors for the sale of real estate, costs of maintaining equipment in good condition until the sale is deducted from the amount received.

Do not forget that even in liquidation, the organization can make a profit.

The difference between the value of the property and the costs during the liquidation period for OAO Romashka amounted to 5,500,000 rubles.

Valuation Approaches

There are three ways to value a business. And according to Russian law, the appraiser (yes, that's right, it's not you who evaluates) is obliged to use all three approaches, and if any of them is not used, then justify in detail why.

1. Profitable

The income method of business valuation is based on the forecast of profit from the operation of the business. Thus, the company's future earnings are reduced to the current value.

In other words, the higher the organization's planned income, the greater the current price of the business.

1.1 Direct capitalization method

Based on the organization's revenue adjusted for the planned business growth rate.

This method is suitable for organizations that plan to maintain or increase the growth rate and profitability of the business, that is, for large, steadily growing companies. In this case, the evaluation formula is as follows:

Where “V” is the value of the business, “I” is the income of the organization, “R” is the capitalization rate.

Income is calculated according to the report on financial results reflected in Form No. 2 financial statements. Most often, these data are taken over a period of 3-5 years and averaged.

If information on income can be found in the financial statements, then the capitalization rate (R) must be calculated using the formula:

R = Discount rate - Projected average growth rate of the company's earnings

Example

The purpose of cost estimation is to improve management efficiency. Note: In 2017, the cost of OJSC Romashka was estimated at 7,500,000, with income of 1,350,000 rubles.

Let's say Romashka OJSC in 2018 has an income of 1,098,000 rubles. We divide this value by the capitalization rate and get the business value equal to 7,320,000 rubles.

So, after the current calculations, we see that the organization is losing ground, business growth rates are declining, the efficiency of cash flow management has become less effective.

1.2 Discounting expected cash flows

This method is based on the fact that the money and assets that the company has now are worth more than the same money and assets in the future.

The discounting method estimates the value of a large business that is affected by various environmental factors, such as seasonality of income.

Cash flow- it's a tide Money to the company.

Discounting of cash flows occurs by multiplying the cash flow by the discount factor according to the formula:

Discounted Cash Flow Formula

Where “DCF” is the discounted cash flow, “r” is the discount rate, “n” is the number of cash flow calculation periods, “i” is the number of the period.

Example

The purpose of the valuation is to determine the effect of the merger of Romashka OJSC with Oblachko OJSC

Let's say Romashka OJSC enters into a partnership with an income of 7,300,000 rubles. per year, and after 5 years of partnership seeks to receive an income of 9,000,000 rubles, with an income rate of 10% per annum. How to determine if a given project is profitable?

Investment cost = (9,000,000) / (1 + 0.1) ^ 5 = 5,588,291.9 rubles.

By means of elementary calculations, it turns out that after 5 years, Romashka OJSC will be able to receive the desired income by investing only 5,588,291.9 rubles. Therefore, the alliance between Romashka OJSC and Oblachko OJSC is profitable.

2. Comparative

In this business valuation method, the organization being valued is compared with similar companies. Similar companies must be similar in terms of economic, material, technical and other conditions.

After selecting analogue companies, suitable multipliers are calculated for them, that is, the ratio of the sale price and the economic indicator.

The value of a business under the comparative valuation method is calculated by multiplying the obtained multipliers by the key financial indicators of the organization being evaluated.

2.1 Deal method (sales method)

This method is based on the analysis of market prices for the purchase or sale of controlling or 100% stakes in organizations similar to the business being valued.

After calculating and applying the multipliers, the resulting business value is reduced to a weighted average. The transaction method uses the following formula:

Business value (capitalization) = Indicator * Multiplier

Example

The purpose of the appraisal is the sale of the business. Therefore, it is necessary to evaluate 100% of all issued shares of OAO Romashka.

We will take the initial data from financial reporting: revenue = 730,000 rubles, value of assets = 410,000 rubles.

By studying the market and external environment, we have chosen three companies - analogues. Since these are public companies, their reporting is open to external users, so we can easily derive multipliers that are interesting to us.

The table below shows the data of peer companies, calculated multipliers and indicators of OAO Romashka.

To determine the exact value of the multipliers, it is necessary to display the weighted values ​​of the multipliers (we have 9.30 and 14.20).

• According to the P\R multiplier - 6,789,000 rubles;
• According to the P\R multiplier - 5,822,000 rubles.

However, the final cost of the business should be the same, so further it is necessary to weigh the resulting values.

If we set the weight to the P\R multiplier - 0.8, and to the P\A multiplier - 0.2, then with the help of elementary calculations we get the total value of the Romashka OJSC business equal to 6,595,600 rubles.

The method does not require further adjustment for the degree of control, since the prices for controlling stakes in peer companies were used as initial information.

2.2. Capital market method

This method is based on the analysis of prices for shares of peer companies available on the market in open circulation.

In this case, experts use multipliers, where the numerator is the share price, and the denominator is a financial indicator, for example, revenue or profit.

This method uses per-share adjustments to financial ratios, such as earnings per share. Otherwise, this method is identical to the trades method:

Business value = Revenue * (Price per share) / (Revenue per share)

Example

The purpose of the appraisal is the sale of OAO Romashka. Despite the fact that the company over the past few years has received an annual profit of 100,000 rubles.

The ratio "price per share / earnings per share" (adjusted per share) for similar companies is equal to 7. How to find out how much OJSC "Romashka" is worth?

Cost of OAO Romashka = (annual earnings) x (multiplier “price per share / earnings per share”)

100,000 x 7 \u003d 700,000 rubles.

2.3 Industry coefficient method

This method is based on the use of pre-calculated and analyzed relationships between the selling price of a business in a particular industry and its financial performance.

For example, marketing agencies can be sold for 0.9 per annum, consulting agencies for 0.7 per annum.

In Russia, the method of sectoral coefficients has not yet become widespread, since there is no in-depth analytics of sectoral indicators by statistical and specialized services.

Example

The purpose of the assessment is to adjust the business development strategy. To do this, we calculate the annual revenue, which is equal to 6,500,000 rubles.

JSC "Romashka" operates in the field wholesale colors. According to market analysis, you can derive an industry coefficient equal to 1.8.

So, having a business value of 11,700,000 rubles. with a revenue of 6,500,000 rubles, the management of Romashka OJSC may decide to expand the network.

3. Expensive

The cost method of valuation determines the value of a business as the price of the company's assets. To apply this approach, the appraiser must have access to reliable information on the costs of acquiring and maintaining assets.

3.1 Net asset method in business valuation

This method is based on asset analysis. The first step is to value intangible assets. Next comes the analysis of inventory items, stocks. Then a detailed assessment of non-monetary assets (accounts receivable) is made.

Method net assets quite simple in calculations, the value of the business is determined by the formula:

Example

The purpose of the appraisal is to identify the value of OAO Romashka for business insurance against credit risks.

It is necessary to determine the amount of assets and debts of Romashka OJSC. So, all assets are determined at 4,573,100 rubles, and debt obligations at 2,546,900 rubles. Thus, the cost of OAO Romashka is estimated at 7,120,000 rubles.

As a result of the assessment, it was determined that Romashka OJSC could be insured for 7,120,000 rubles.

3.2 Salvage value method

It is used when it is already known for sure that the business will be liquidated, and the owners need to determine the value of the business for quick implementation. Calculation formula:

Business Value = Market Value of Assets - Liabilities

Since the company is being liquidated, we calculate the proceeds from the sale of equipment, stocks and materials, adjusted for quick sale.

Thus, the market value of the assets of Romashka OJSC is determined at 5,213,100 rubles. At the same time, the cost of maintaining and servicing equipment and supplies until the sale will amount to 543,000 rubles.

Behind Lately the organization has formed significant debts to creditors, which amount to 1,876,000.

Also, at closing, it is necessary to pay all severance benefits to employees, which in total amount to 665,200 rubles. The profit for the liquidation period will be 4,871,100 rubles.

As a result, the cost of OAO "Romashka" by the liquidation value method is determined at 7,000,000 rubles.

Method Conclusions

After a detailed consideration of all approaches to business valuation, it is advisable to structure the information received and to derive the advantages and disadvantages of each method.

An approach	Advantages	disadvantages	The best situation for a method
Profitable	Analysis of future income; takes into account the characteristics of the company; universal, suitable for different evaluation purposes; identifies weaknesses in the business	Forecast data is used; complexity of calculations; subjective and probabilistic nature of the results; inaccurate results	Improving management efficiency; rationale for the decision to launch an investment project
Comparative	Actual market data is used; evaluates efficiency under current conditions	Does not take into account the expectations of investors; the difficulty of finding similar objects in some industries	Deciding on an additional issue of shares; change in development strategy; buying or selling a business; restructuring
costly	Assets are valued; the accuracy of the estimate is justified; calculations are very simple, information is available	Development prospects are not taken into account; reflects the past value of the business; value may not correspond to current market prices	Liquidation or quick sale; revaluation of assets; assessment of the financial performance of the organization; solvency of the company and the value of collateral for lending, insurance

Note on Methods

So, after the calculations are made by the three methods, it is necessary to identify the final result. By the way, the cost should be approximately the same.

The data differ mainly because one particular approach fits the purpose of the assessment more than others, or more fully takes into account the current situation. Coordination is carried out according to the formula:

Total cost = Profitable × K1 + Comparative × K2 + Costly × K3

“K1”, “K2”, “K3” are weight coefficients selected depending on the significance of a particular cost in final assessment. The coefficients must add up to one.

Example

Consider the already familiar Romashka JSC. Calculation data in the table below.

Explanation of the coefficients: the appraiser believes that the comparative is the most significant in this case, so it is assigned the maximum weight.

So, having calculated according to the formula, the final agreed value of the business is determined at 6,924,200 rubles.

Wow! I thought we'll count once and that's it

Step-by-step instruction

In this chapter, I will cover the main steps in business valuation. Naturally, every business has its own nuances, it is important to remember this.

1. Goal definition

The first step is to determine the purpose of the business valuation. This step is important for the implementation of the economic interests of the parties that have come to a decision on business valuation. And most often the assessment is carried out in the following cases:

1. To improve the efficiency of the organization's management;
2. Justify the decision to launch an investment project;
3. Buy or sell a business, or a share of it;
4. Restructure the enterprise;
5. Develop a long-term development strategy;
6. Assess the financial performance of the organization;
7. Decide on the issuance and sale of securities.

2. Choosing an appraisal company

This is very important step. In many countries, business valuation is carried out by independent professionals who adhere to established industry standards in their work.

A good tool that can help when choosing an appraiser is the ratings of trusted agencies, such as:

1. Rating agency Expert;
2. Publishing House Kommersant.

The main criteria for choosing an appraiser may be the period of work in the market, professionalism and reputation, the presence of a list of well-known partners who have already used the services of the company, positive

The value of the current business is an objective indicator of the functioning of the enterprise and reflects the current value of the benefits in the future from its functioning. This allows you to calculate the most likely price at which it can be sold on the open market. The question of how to assess the value of a business is of a practical nature and is of great importance for every entrepreneur at various stages of the company's functioning.

How is business valuation carried out

First of all, it is necessary to determine main goal, which is the process of calculating the value of the business. There are two options here.

First option- the cost is necessary for the implementation of certain legal actions. That is, you need to get official conclusion in the form of an "Evaluation Report" to be prepared independent appraiser licensed to carry out this procedure.

Second option– an appraisal is carried out to determine how much the real value of your business is. To do this, you no longer need the "Valuation Report", in accordance with the requirements of Law No. 135-FZ.

These options have a fundamental difference not in the quality of the work that the appraiser performs, but in relation to the results obtained. Valuation activity is a licensed type of activity. For this reason, certain requirements are imposed on it from the side current legislation. The fulfillment of these requirements in the process of compiling the Assessment Report, as a rule, causes an increase in the cost of the specialist's work.

If the results of the work are drawn up not in the form of an official Report, but as a Conclusion, during the negotiations, a detailed development and agreement of a clearly formulated task for the assessment takes place. According to this task, the appraisers will perform only the procedures you specify, which are required to resolve certain issues.

Business valuation is a procedure in which it is required to calculate the value of a business as a property complex, which provides its owner with a profit.

The assessment takes into account the value of all assets of the company: machinery, real estate, equipment, financial investments, stocks, intangible assets. It is also necessary to take into account past and future income, possible prospects for the further development of the company, competitive environment and the state of the market as a whole. Based complex analysis the company is compared with peer companies. After that, information about the real value of the business is already formed.

Methodology

Three methods are used to calculate the value of an enterprise.: costly, profitable and comparative. In practice, there are different situations, and for each class of situations, their recommended methods and approaches are used.

For an adequate choice of method, it is necessary to classify situations in advance, determining the type of transaction, the features of the moment for which the assessment is carried out, and so on.

Certain types of enterprises are most often evaluated on the basis of commercial potential. For example, for a hotel, guests are the source of income. This source is subsequently compared with the cost of operating expenses to determine the profitability of the business. This approach is called profitable.. This method is based on discounting the profit received from the rental of property. The valuation results under this method include both the land value and the building value.

If a business is not bought or sold, a developed business market in this direction does not exist, for example, consider a hospital or a government building, then assessment can be carried out on the basis of the cost method, that is, it will take into account the cost of building a building, taking into account depreciation and depreciation costs.

If there is a market for a business that is similar to the one being valued, the market or comparative method can be used to determine the market price of the enterprise. This method is based on the selection of comparable properties that have already been sold on the market.

Under ideal conditions, all three methods used should give the same value. But in practice, markets are imperfect, producers may operate inefficiently, and users may have imperfect information.

These approaches involve the use of various evaluation methods.

The income approach includes:

• cash flow discounting method, focused on the assessment of the existing business, which will continue to operate. It is more often used to evaluate young companies that have a promising product, but have not yet earned enough income for capitalization.
• the capitalization method is used for those enterprises that, during capitalization, accumulated assets in previous periods.

The cost approach includes:

• salvage value method;
• the net asset method, applicable in cases where the investor plans to significantly reduce the volume of output or even close the enterprise.

Comparative approach includes:

• the method of industry coefficients, focused on the assessment of existing companies, which will continue to operate in the post-reporting periods.
• a method of transactions applicable in cases where it is planned to reduce output or close an enterprise.
• capital market method, also focused on operating enterprises.

Methods of the comparative approach are applicable only when choosing a company-analogue, which must be of the same type as the company being valued. Below we will briefly review the use of the main methods for calculating the value of a business.

Brief instruction

To calculate the value of your business in the forecast period, you must use the discounted cash flow method. A discount rate is used to bring future income to present value.

Then, according to the forecast, the value of the business is calculated using the following formula:

P = CFt/(1+I)^t,
where I- discount rate, CFt denotes cash flow, and t is the number of the period for which the assessment is made.

At the same time, it is important to understand that your enterprise will continue to function in the post-forecast period. Depending on the future prospects business development, various options are possible from complete bankruptcy to rapid growth. For calculations, the Gordon model can be used, which assumes stable growth rates of profits and sales and the equality of depreciation and capital investments.

In this case, the following formula is used:
P \u003d CF (t + 1) / (I-g),
where CF (t+1) reflects the cash flow for the first year of the post-forecast period, g– flow growth rate, I- discount rate.

This model is most appropriate when calculating indicators for businesses with a significant market capacity, stable supplies of materials, raw materials, as well as free access to financial resources and a generally favorable market situation.

If the bankruptcy of the enterprise and the further sale of property are predicted, then, To calculate the value of a business, you must use the following formula:
P \u003d (1-Lav) x (A-O) - Pliq,
where P liq- expenses for the liquidation of the enterprise, L cf– discount for urgent liquidation, ABOUT– amount of liabilities, BUT- the value of the company's assets, taking into account the revaluation.

Costs include insurance costs, taxation, appraiser's fees, management costs, and personnel payments. The liquidation value also depends on the location of the company, the quality of the assets, the overall market situation and other factors.

In the course of the assessment of domestic enterprises, the date of the assessment is of great importance. The binding of settlements to the date is especially important in a market that is oversaturated with property that is in a pre-bankrupt state and lacks investment resources.

The Russian economy is characterized by an excess of asset supply over demand. This imbalance affects the value of the property offered for sale. The price of property in a balanced market will not match the value in a depression. But investors and business owners will be primarily interested in the real value in a particular market under certain conditions. And buyers are focused on reducing the likelihood of losing money, so they require guarantees. When assessing the value of a business, it is required to take into account all risk factors, including bankruptcy and inflation.

In inflationary conditions, at first glance, it is best to use the discounted cash flow method for calculations. This is true only if the rate of inflation is predictable. However, it is quite difficult to predict the flow of income in the conditions of instability for several years ahead.

Articles

How to evaluate ready business?

A few seditious thoughts

I am sure that professional appraisers will not like this article. Many of them may even want to crucify me upside down on the cross for seditious thoughts about the appraisal business. The fact is that the role of this sphere, its place in the modern economy, especially in small and medium-sized businesses, are often exaggerated, redundant, and practical conclusions are controversial.

What is, by and large, a market valuation of a business? This is a determination of the cost for which it can be sold, and what profit it will bring in the future. Professional appraisers have at their disposal several basic valuation methods, the content of which is widely covered in the valuation literature and enshrined in valuation legislation.

Three methods are used in Russia: "income approach", "cost approach" and "comparative approach". All these methods are complex, require special training, and for an ordinary entrepreneur, whose motto is "act and earn!", They will seem unnecessarily complicated and have a very distant relation to his activities in the form of a pair of outlets, a car service or an online store.

Maybe appraisers are right with their calculations when it comes to large enterprises and transnational corporations?

Alas, not always. Otherwise, the stock market, stock trading and other securities would simply die, or would never experience the colossal fluctuations that we periodically observe. Indeed, in the stock markets, especially in countries with developed and rapidly developing economies, colossal money is spinning. Investment funds, management companies, before purchasing shares or bonds of certain companies, actually conduct a thorough assessment of the value of enterprises, rightly expecting a certain level of dividends or capital gains.
If business valuation methods were correct, then the movement of funds in the stock markets would be insignificant, since everyone represented quite accurately how much one could get by investing in a particular company. In fact, the stock market is very volatile and subject to significant fluctuations, sometimes contrary to the obvious logic and methods of calculating business valuation.

Take, for example, the latest stock market crisis. China suffered the greatest losses - since the beginning of this year, the total index of shares of Chinese enterprises has decreased by 20 percent. At the same time, China's GDP growth in 2007 amounted to 11.4 percent, the forecast for 2008 is approximately the same. So where did a fifth of the Chinese potential evaporate in a short time? It turns out that professional appraisers corrected their forecasts so quickly, having made a mistake by trillions of dollars?

What do I care, - an ordinary entrepreneur will say, - to China's GDP, investment funds of valuation methods and other high matters? And he will be right. No one but him can better assess the potential and value of his business. Indeed, in most cases, only the entrepreneur thoroughly knows all the weak and strengths their business, as well as the limit of its development. In order to evaluate the business yourself, it is enough to know a few basic points and follow common sense.

Shortcomings of Individuals

The sale of a ready-made business serves as a kind of moment of truth for an entrepreneur. The point is not even so much in how you developed it, but in the fact that by the time of the sale, due to ignorance of some legal aspects, its value may turn out to be much less than you imagined it. This is especially influenced by the choice of the organizational and legal form of doing business.

Many Russians, when starting their own business, register as individual entrepreneurs. Yes, this form has a lot of advantages: ease of registration, lower penalties, no need to make a seal and open a current account, etc.

But there are also disadvantages, one of which is directly related to the topic of the article - this form of entrepreneurship does not allow you to sell your business in one fell swoop as a complex of ready-made businesses. It is no coincidence that all business valuation methods enshrined in law are sharpened under legal entities. After all, you are acting as an individual, and all contracts, property, permits, licenses, franchises, rights to trademark and so on are made out to you.

The buyer will have to re-register all this for himself, spending a lot of time and money. Naturally, all costs, including payment for speed, affect the final amount of the transaction. And it is not yet a fact that, by renewing the contract with the new entrepreneur, the landlord will provide the new owner with the same conditions as you. He may simply not like the personality of the buyer.

So, if you intend to sell your business, in advance, minimize the number of documents that require re-registration.
It is advisable to transfer your status as an entrepreneur to the owner of an LLC or a joint-stock company when your business has reached a more or less significant scale. Then you can safely prepare for its sale in whole or in large part.

On the contrary, when purchasing a business, remember about possible additional costs associated with the peculiarities of its organizational and legal form - individual entrepreneurs are not sold, only their property is subject to sale, and rights under concluded agreements are assigned.

One business, three costs!

When you are about to sell your business, you have little interest in the motives of potential buyers at first. However, it is motivation that can have a significant impact on the final price of the transaction, that is, on its market value. A buyer can have three main goals, but they are all related to generating income:

1. Sale of your business in parts or further resale. It is quite possible that you own real estate objects or the right to lease a land plot located in a promising area where active development of residential buildings or shopping malls. Or is it a resale of a regional brand that you have developed, such as Petrov's Krupa, to some large Russian or foreign agro-industrial holding that is ousting competitors locally.

Approximately according to this scheme, the once famous Armavir Tobacco Factory, which has now become a haven for numerous offices, was bought out and then resold to one of the international tobacco concerns. In this case, the concept of liquidation value is applicable - the price of assets minus the total amount of liabilities and costs of sale.

2. Income from the activities of the enterprise. The buyer is interested in maintaining and developing the business. Perhaps some repurposing, reorganization or affiliation.

In this situation, we are talking about investment value, which takes into account the increase in profits from market expansion, the use of know-how, reorganization plans of the proposed owner. There's a lot of bargaining to be had here, just as Yahoo's shareholders did when they finally turned down Microsoft's super lucrative $44.6 billion offer. The guys from Yahoo apparently felt that in the future their company would cost much more.

3. The combination of the maximum values ​​of the two values, liquidation and investment, results in a reasonable market value. Sell ​​your business on this very favorable price perhaps, as a rule, to professional investors specializing in the acquisition, development and further sale of a business. These can be local businessmen involved in everything that brings money, and representatives of large companies.

Therefore, if you consider your business profitable and promising, feel free to contact large investment companies and diversified holdings of oligarchs with an offer. Surely they do not know about your existence and, if they are interested, they can give a fair price that is beyond the reach of competitors of your level. You can also advertise on specialized bulletin boards or business portals. Today in Russia there is a lot of money, the owners of which are looking for investment objects.

What is the investor thinking?

Any investor, whether investment fund or your neighbor, thinks about how quickly the investment will pay off and begin to generate income. By the way, this is one of the most effective, but at the same time a simple and logical way to assess the value of a business. Professional appraisers would see elements of the "profitable" method in it.

In the late 1990s and early 2000s, an attractive payback period was in the small and medium, and sometimes in big business Russia 1.5-2 years. As the value of the business increased, the payback period increased to 2-3 years. And in large - and up to 5. In the West, the standard is a period of 7-8 years, which is quite reasonable, given the lower cost of credit resources.

The payback period is directly affected by several factors. Firstly, total cost business, its scale - the more expensive, the longer you have to wait. But then every month there will be a much greater return.

Secondly, the value of the lending rate - the higher it is, the faster business should generate income. Otherwise, bank deposits will become a more attractive alternative than buying a ready-made business.

The third factor is the rise in prices for real estate, land and, accordingly, the cost of rent. Land and real estate are becoming more and more expensive, their share in costs is increasing, which leads to an increase in expenses not related to business development, and therefore reduces overall profitability and lengthens the payback period.

The fourth defining moment is the turnover cycle. The shorter it is, the less working capital and funds to start and, therefore, time to recapture the money. It is one thing to sell newspapers and magazines, and another to do construction and repair work. Although the profitability is almost the same.

In practice, the calculation is simple. Let's say your two outlets(standard kiosks) give 120 thousand rubles. net income per month. The kiosks are owned by you, but built on rented municipal land. They are not considered full-fledged real estate objects, they appear as temporary structures, and they will not let you buy the land under them, but they can be withdrawn at any time for city needs. Therefore, as an asset, they do not represent independent value. In this case, a reasonable selling price of your business, given the profitability and short turnover period, may be equal to the amount of profit that you receive in a period of one to two years - from 1.44 million to 2.88 million rubles.

The provisional principle is also followed by many large companies. For example, the Tander company, which owns a chain of stores retail"Magnet" adhered to the following tactics - opening a store in a new place, the company waited 4 months. If the store began to pay for itself, they left it. If not, closed.

For the price of an entrance ticket, or draw up a business plan

Estimating the value of a business depending on the payback period is, of course, convenient and simple, but it misses several important things that could increase its price. First, how much do similar offers cost on the market, and how much time and money would it take for a buyer to create and develop such a business on their own? It is possible that for you personally, thanks to connections in the mayor's office or equipment or premises bought on the occasion, the business cost much less and you developed faster. Selling based only on the payback period would be illogical. Therefore, it is useful to at least roughly estimate the cost of the "entry ticket" from scratch.

Calculate how much you would have spent by the time of the sale at current prices of money on rent, purchase of equipment, advertising, what would be the total amount of costs until the moment of the first profits. Simply put, draw up an approximate business plan, but taking into account your knowledge of all the nuances. Such an approach is called "costly" by independent appraisers.

A business plan, even the simplest one, will help you convince a potential buyer that your business is worth buying. Try to take into account all your strongest points in this business plan for the client. competitive advantages. For example, your hairdressing salon employs the best craftsmen in the area, for the sake of which people come to you who are ready to overpay for quality. Or that you have the best imported manufacturing equipment in the area bakery products or dumplings.

A good name is worth a lot

Surely you are not the only one who is going to sell a business like yours. It is natural that potential buyer will compare all available proposals, and will most likely need to apply elements of the so-called "comparative" approach. The accuracy of the estimate depends on the quality of the collected data, since, using this approach, it is necessary to collect reliable information on recent sales of comparable properties.
This data includes: economic characteristics, time of sale, location, terms of sale and terms of financing. For example, it is one thing to sell a business for cash, another thing is to sell it on credit.

The effectiveness of the comparative approach is reduced if there were few transactions or a lot of time passed between them; if the market is in an abnormal state, as rapid changes in the market lead to distortion of the indicators. For example, a new head, a well-known lover of the redistribution of property, was appointed (elected) in a district or city. Or, as in Sochi, they decided to hold the Olympic Games.

In order not to suffer much with a comparative assessment of a business, you can resort to an analysis of franchise offers similar to your profile, which indicate the requirements for a franchise buyer. The main one is the amount of investment for the business to operate and develop. Simply put, the franchisee is asking you to work with their technology, brand, style, and so on. A franchise can be sold to almost any type of small and medium-sized business: sushi delivery, travel agencies, restaurants, stamp shops and real estate agencies, etc. Type "franchise" or "franchise directory" into an Internet search engine and you will find hundreds of offers indicating the amount needed to start a business.

At the same time, the comparative approach allows you to focus on your individual characteristics, on the intangible assets created during your work. Western economists, and now Russian ones, use such a concept as "goodwill" (goodwill - good will).
Goodwill is essentially a combination of those elements of a business or personal qualities that encourage customers to continue to use the services of this enterprise or this entrepreneur, and which generate a profit in excess of that which comes from tangible as well as intangible assets that are subject to an accurate monetary value.

It is said to occur when you make a profit higher than the average in this area of ​​\u200b\u200bbusiness, that is, people are predisposed to buy from you.

Goodwill includes a favorable location, an established clientele, and the credibility of individual employees. This factor cannot be felt and calculated, but it is necessary to evaluate. Indeed, the development of any business is based on good relations, that is, the good will of sellers and buyers. And your task is to convince the buyer of your business that you have earned goodwill, and it is not in vain that he pays an additional 10-20 percent for a promising and promoted business.

When You Can't Do Without an Appraiser

Having fired a couple of arrows in the direction of the institution of professional appraisers, for the sake of truth it is worth noting that in practice there are moments when you simply cannot do without professional appraisers.

Firstly, in a dispute with the tax office over the market value of the object of sale and purchase in the form of real estate. For example, you bought a room for a workshop for 3 million rubles, and the tax authorities, in accordance with Article 40 of the Tax Code, having the right to control prices to determine the taxable base, they say - you, brother, underestimated the cost of the room and did not pay extra taxes.

This is where the conclusion of a professional appraiser helps in a dispute with the inspection, which will become an argument for setting the transaction price corresponding to the current market value. The opinion of a professional has the status of an official document and can be used in an arbitration court as convincing evidence in cases involving the determination of the completeness and correctness of the calculation and payment of taxes. In addition, sometimes it is beneficial to officially revalue the property of the enterprise downward, which helps to save on property tax.

The second category of partners of an entrepreneur, in relations with which the opinion of appraisers can be useful, are banks. By issuing secured loans, banks try to underestimate the value of the pledged property. Determining the real market value of the property by an independent appraiser makes it possible to establish a fair ratio between the value of the pledged property and the amount of the loan. In case of non-repayment of the loan, the official conclusion contributes to the prevention of disagreements between the parties to the transaction that arise when foreclosing the pledged property.
Professional appraisers are a great help even if you use the services of insurance companies. There are several hidden points that insurers prefer to remain silent about.

A case from one's life. The entrepreneur insured the warehouses he purchased for a fairly decent amount. But when the fire broke out, the insurance company offered a much smaller amount to be paid than was indicated in the contract, stating that, based on current legislation, the contract is void in terms of the excess of the sum insured over the actual (market) value of the property. It was of course impossible to determine in hindsight how much the burned warehouse cost. At the same time, the overpaid insurance premium was not returned to the entrepreneur.

If, at the time of concluding the insurance contract, the entrepreneur was armed with the appraiser's conclusion, there would be no problems - the examination carried out by an independent appraiser categorically does not allow the insurer to subsequently dispute the sum insured under the contract.

There are other times when professional assessment helps entrepreneurs. Among them, it should be noted the assessment of damage in the event of an insured event, as well as damage to the property of the entrepreneur or third parties. Knowing how much you really lost, you will be able to clearly justify your position in a controversial situation, including in a lawsuit.

D. Protasov, business consultant
Journal " Modern Entrepreneur. Individual approach to business", N 3, March 2008