By Sudarsan Pattabiraman (M&A Advisor) | 510.944.5616 | sudarsan@upclinch.com
Business valuations vary from person to person due to several factors as listed below. A good valuation is key for your succesful exit and find your M&A advisor that is correct most occasions if not always.
1. Subjective Assumptions
- Valuers may use
different methods (income, market, or asset-based) and have varying perceptions
of risk, growth, and future potential, leading to different outcomes.
2. Industry Expertise
- Different levels
of industry knowledge can lead to varied benchmarking and interpretations of
market trends and competition.
3. Intangible Assets
- Valuing
intangibles like intellectual property and goodwill is subjective, so different
valuers may assign different importance to these assets.
4. Economic Outlook
- Valuers may have
different perspectives on the economy and market conditions, influencing their
assessments.
5. Personal Bias and Experience
- Individual
preferences for specific financial metrics, past experiences, and personal
biases can affect valuations.
6. Valuation Methods
- Differences in
applying valuation models, inputs, and weights for comparable sales can lead to
different results.
7. Access to Information
- Valuers may have
varying levels of information or interpret the same data differently.
8. Buyer vs. Seller Perspective
- Buyers and
sellers may have different priorities (risk vs. potential), and valuers may
adjust based on the side they represent.
In summary, the combination of subjective judgment, industry
expertise, economic outlook, and personal biases causes business valuations to
vary among professionals.
Call Sudarsan for planning and executing your perfect exit. Let’s
unlock the business value and realize it for the benefit of you, your family
and your community.
Email:sudarsan@upclinch.com Phone: 510.944.5616
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