Business Valuation Worksheet
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  • 1. Business Valuation Worksheet Enter Business Name: StarFunding Before you begin, you will need to gather some financial information including: *Income tax returns for the last two years *W-2 forms for business owners, last year. *Estimated current cost of any business inventory. $________________ *Estimated value of any real estate owned by the business. $________________ *Estimated debt/loans on inventory or real estate. $________________ *Estimated amount of OWNER'S REPLACEMENT SALARY which is the fair market salary (to the nearest thousand) the owner would have to pay someone to take over their job. Even if Form 1040 Schedule C or C-EZ is used or if the owner does not take a salary, enter the estimated salary that would have to be paid to a manager to take over the duties of the current owner. If the current owners do not participate in running the business, enter zero. $________________ *Estimated amount of OWNER'S DISCRETIONARY EXPENSES (to the nearest thousand) that the current owners deduct through the business. This amount includes wages paid to the spouse or family members of the owner in excess of market rates as well as benefits paid and deducted by the company for the benefit of the owner, spouse, and family. These expenses could include automobile costs, medical, dental, or life insurance premiums, retirement plan payments and bonuses. Also include charitable contributions if deducted by the business for income tax. 1. How many hours per month does your company dedicate to charitable efforts (i.e., working with non-profit organizations)? __________Hours per year. 2. How much do you spend/contribute in hard dollars to non-profit organizations per year? $_________________. OWNER'S DISCRETIONARY EXPENSES - If none, enter zero. $___________ 1-7
  • 2. Business Valuation Worksheet Enter Business Name: StarFunding *Estimated amount of NON-RECURRING INCOME received during the year (to the nearest thousand) that is not business related. This includes interest and dividend income, insurance proceeds, and any income a new owner would not be entitled to receive. If none, enter zero. $________________ *Estimated amount of NON-RECURRING EXPENSES paid during the year (to the nearest thousand) that are not ordinary. These include unusual theft or damage expenses, litigation costs, and/or any expenses during the year that will not recur from year to year. If none, enter zero. $________________ *Estimated amount of CHANGE IN SALES, either increase or decrease, for the next three years. If sales are expected to increase a fixed percentage each year, enter the percentage: 10% increase enter 1.10, 15% increase enter 1.15, etc. If sales are expected to double, enter 2.00. %________________ If sales are expected to be flat with no increase or decrease, enter 1.00. If sales are expected to decline, enter a number less than 1.00. If current sales are $100 and are expected to decrease to $90 next year, you would enter 0.90 ($90/$100=.90). *Estimate of BRAND EQUITY: 3. How many flyers (direct mail and electronic news letter) pieces do you send a month? ________________ Pieces. 4. How long have you been at your present location? 5. How many logo (brand) impressions (either in newspaper, magazines, media) does your business generate? *Enter the business owner's personal estimate of the business' value (to the nearest thousand). $________________ 2-7
  • 3. Opportunity Assessment Enter Business Name: StarFunding *Read each statement, then select a value from 1 to 5 that best describes this business. If a question does not apply to this business, select 3 CUSTOMER LOYALTY (circle one) 1 The owner is important to customers. A significant number of customers would leave if the owner leaves. Example: Sole Practitioners (Doctors, Attorneys, CPAs etc.) 2 Somewhere between 1 and 3 3 The owner is somewhat important to customers. A few customers would leave if the owner leaves. 4 Somewhere between 3 and 5 5 The owner is not important to customers. No customers would leave if the owner leaves. Example: Chain fast food restaurant or a business without owner management/participation. CUSTOMER MAKEUP (circle one) 1 Most of the company's income comes from one or two major customers. Example: Manufacturer selling parts to auto makers 2 Somewhere between 1 and 3 3 The company's income comes from an equal mix of large and small customers. 4 Somewhere between 3 and 5 5 Most of the company's business is from many small customers. Example: Fast food restaurant 3-7
  • 4. Opportunity Assessment Enter Business Name: StarFunding VENDOR MAKEUP (circle one) 1 The business is highly reliant on one or two vendors for business resources. The loss of one source would significantly hurt the business long term. Example: Chain gas stations. 2 Somewhere between 1 and 3 3 The business has several vendors from which it can obtain business resources. The loss of one vendor would cause disruption, but would not cause long term damage. 4 Somewhere between 3 and 5 5 The business has many sources to obtain business resources. The loss of any source would not impact the business at all. Example: Retail store selling a variety of goods EASE OF ENTRY (circle one) 1 Starting a new business in the same line of work would be easy. All that is needed is a little time, money, and possibly some training. Example: Lawn maintenance/mowing service 2 Somewhere between 1 and 3 3 Starting a new business in the same line of work would take some effort. 4 Somewhere between 3 and 5 5 Starting a new business in the same line of work would be extremely difficult. It would take considerable time, capital, and training. Example: Heavy manufacturing 4-7
  • 5. Opportunity Assessment Enter Business Name: StarFunding BUSINESS APPEAL (circle one) 1 The business would not be appealing to most buyers. Poor working conditions, hours, location, etc.. Example: Garbage collection. 2 Somewhere between 1 and 3 3 The business is about average in its appeal to most buyers. Average working conditions, hours, location, etc. 4 Somewhere between 3 and 5 5 The business would appeal to many buyers. Great working conditions, hours, location, etc. Example: Indoor 9 to 5 business. SALES TRENDS (circle one) 1 Total sales will probably decline in the next few years. 2 Somewhere between 1 and 3 3 Total sales will probably increase slightly in the next few years. 4 Somewhere between 3 and 5 5 Total sales will probably increase tremendously in the next few years. BUSINESS MANAGEMENT (circle one) 1 The business is managed by the owner. A two week vacation would be impossible. Example: Sole Practitioners (Doctors, Attorneys, CPAs etc.) 2 Somewhere between 1 and 3 3 The business owner and staff share responsibilities. It would take some work, but the owner could take a one week vacation with little disruption to the business. 4 Somewhere between 3 and 5 5 The business is well managed and staffed. The owner could take a two week vacation with no disruption to the business. Example: Absentee owner businesses. 5-7
  • 6. Opportunity Assessment Enter Business Name: StarFunding EQUIPMENT INVESTMENT (circle one) 1 The business has outdated tools and equipment. New tools and equipment need to be purchased. 2 Somewhere between 1 and 3 3 The business has what it needs to get the job done. Some new equipment would be nice, but not necessary. 4 Somewhere between 3 and 5 5 The business has the most current tools and equipment. No additional investment is needed. INDUSTRY TRENDS (circle one) 1 The business is in a declining industry/service. Example: Bound encyclopedia sales 2 Somewhere between 1 and 3 3 The business is an industry/service that keeps pace with the national economy. 4 Somewhere between 3 and 5 5 The business is in a fast growing industry/service. Example: Internet service providers LITIGATION EXPERIENCE (circle one) 1 The business has been sued by customers or fined by the government many times. Example: Asbestos producing companies. 2 Somewhere between 1 and 3 3 The business may have been sued or fined once or twice. 4 Somewhere between 3 and 5 5 The business has never been sued by customers or fined by the government and probably never will. Example: Retail stores 6-7
  • 7. Enter Business Name: StarFunding Disclaimer I certify all the above information is accurate and has not been falsified at any moment. Note that your input will become part of loan referral disclosures to lender, if client is interested in accessing capital. The undersigned business owner’s authorized agent, referred to as Client, requests business counseling and/or consulting services provided by Perini Enterprises. The information, counseling, and assistance provided by consultant/counselors are not intended as representation or any warranty either expressed of implied that any advise, assistance, or service will result in profit or any result for client. Clients will have no cause for action against Perini Enterprises or any of its divisions or employees based on any advise, recommendation, service, or assistance provided to Client. In the event that any third party, employees, or agent of Client should bring legal action against Perini Enterprises, Client agrees to indemnify and hold Perini Enterprises and any of its divisions or employees harmless including the payment of any attorney fees and costs that may be incurred in making or defending any claim or action. I certify that the information above is true to the best of my knowledge. Name:___________________ Client Signature: _________________ Date__________ Please complete entire package and call Alain Romero To arrange for Collection. 7-7