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5 Major PointsPharr Valuation & Business Services, LLC   1
5 Major Points1. Why Me2. What It Is (What It “Ain’t”)3. Why You May Need it4. Business Valuation Overview5. Case Studies ...
• I am not a Tax Attorney.• This should not be taken as tax or  estate planning advice, but only as  issues and areas to c...
•   Jewelry Industry - 28 Years•   EVP and CFO of Hoover & Strong, Inc.•   JBT•   24K Club of New York•   JVC•   CPA•••   ...
• A Business Valuation is an  Comprehensive Appraisal of the  Overall Value of a Business or  Business Interest.          ...
• Typical client    – Family Owned Businesses    – Closely Held Companies.•   Gift & Estate Tax Planning•   Succession Pla...
• Dec 2012 – Gift & Estate Tax Laws Expire• Business Values are low. You can give  away a larger interest.• Dec 2012 – Gif...
Purpose of ValuationInterest being Valued                            VALUATION REPORTStandard of Value                    ...
• Full Valuation Report  –   Detailed Comprehensive Report  –   75 to 100 Pages  –   Conclusion Of Value for the Appraised...
• Time Frame: Four to Six Weeks• Cost:  – Generally Fixed Fee  – Based on the Estimated Time Plus Expenses  – Depends on C...
Pharr Valuation & Business Services,                LLC                    11
Pharr Valuation & Business Services, LLC   12
• Gift & Estate Planning should be done• Owners need a Succession Plan• Having a Buy/Sell is better than not having  one• ...
• Succession Plan• No Children• One Child• More than one Child who wants to be in the  business• More than one child, some...
Buy /Sell Agreements     Selling to Other Owners     Buying Another Owner’s Interest     Selling to Existing Employees    ...
• Death of a Spouse• Death of a Parent• Death/Retirement/Termination  – Family Member or Partner  – Succession Plan  – Buy...
5 Major Points1. Why Me2. What It Is (What It “Ain’t”)3. Why You May Need it4. Business Valuation Overview5. Case Studies ...
Dan PharrPharr Valuation & Business Services, LLC2720 Newquay LaneRichmond, VA 23236-1362Office: 804-332-5458 Cell: 804-37...
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Business Valuation - What is it?

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Presentation to the April 2012 American Gem Society Conclave on Business Valuation in connection with succession, gift and estate planning and buy/sell agreements

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Business Valuation - What is it?

  1. 1. 5 Major PointsPharr Valuation & Business Services, LLC 1
  2. 2. 5 Major Points1. Why Me2. What It Is (What It “Ain’t”)3. Why You May Need it4. Business Valuation Overview5. Case Studies Pharr Valuation & Business Services, LLC 2
  3. 3. • I am not a Tax Attorney.• This should not be taken as tax or estate planning advice, but only as issues and areas to consider.• You should consult a experienced estate tax attorney when considering any gift or estate tax planning ideas or issues. Pharr Valuation & Business Services, LLC 3
  4. 4. • Jewelry Industry - 28 Years• EVP and CFO of Hoover & Strong, Inc.• JBT• 24K Club of New York• JVC• CPA••• Specialty - Jewelry Industry Pharr Valuation & Business Services, LLC 4
  5. 5. • A Business Valuation is an Comprehensive Appraisal of the Overall Value of a Business or Business Interest. “ It Ain’t “• A Business Valuation is not a: – Real Estate Appraisal – Equipment or Machinery Appraisal – Inventory Appraisal Pharr Valuation & Business Services, LLC 5
  6. 6. • Typical client – Family Owned Businesses – Closely Held Companies.• Gift & Estate Tax Planning• Succession Planning• Buy/Sell Agreements• Sales/Acquisitions/Mergers• Owner / Stockholder Disputes• Marital Dissolution Pharr Valuation & Business Services, LLC 6
  7. 7. • Dec 2012 – Gift & Estate Tax Laws Expire• Business Values are low. You can give away a larger interest.• Dec 2012 – Gift & Estate Tax Laws Expire• Current Gift and Estate Tax Exclusion is $5,120,000 per person – 35% Max Tax• Dec 2012 – Gift & Estate Tax Laws Expire Pharr Valuation & Business Services, LLC 7
  8. 8. Purpose of ValuationInterest being Valued VALUATION REPORTStandard of Value Trudi’s Fine JewelryPremise of ValueFinancial Analysis Naples, FloridaEconomic Analysis Valuation Date: December 31, 2011 Report Date: February 3, 2012Company AnalysisValuation Approach Conclusion and Opinion of Value Pharr Valuation & Business Services, LLC 8
  9. 9. • Full Valuation Report – Detailed Comprehensive Report – 75 to 100 Pages – Conclusion Of Value for the Appraised Interest – Support Values on a Gift or Estate Tax Return• Calculation of Value – Less Detail – 20 to 40 Pages – Calculated Value Based on Agreed Upon Procedures – General Ball Park Value Pharr Valuation & Business Services, LLC 9
  10. 10. • Time Frame: Four to Six Weeks• Cost: – Generally Fixed Fee – Based on the Estimated Time Plus Expenses – Depends on Company Size, Complexity, Condition of Records – Full Valuation Engagements • 40 to 60 Hours – Calculation of Value Engagements • 20 to 30 Hours Pharr Valuation & Business Services, LLC 10
  11. 11. Pharr Valuation & Business Services, LLC 11
  12. 12. Pharr Valuation & Business Services, LLC 12
  13. 13. • Gift & Estate Planning should be done• Owners need a Succession Plan• Having a Buy/Sell is better than not having one• There is a mechanism to Fund the plan Pharr Valuation & Business Services, LLC 13
  14. 14. • Succession Plan• No Children• One Child• More than one Child who wants to be in the business• More than one child, some want to be in the business and some do not.• Gift the business to your children, sell it to them or do some of both? 14 Pharr Valuation & Business Services, LLC
  15. 15. Buy /Sell Agreements Selling to Other Owners Buying Another Owner’s Interest Selling to Existing Employees Selling to someone outside the CompanySources of Funds Internal Life Insurance Bank Other Hit Lottery / Get Lucky While at the Vegas Show Pharr Valuation & Business Services, LLC 15
  16. 16. • Death of a Spouse• Death of a Parent• Death/Retirement/Termination – Family Member or Partner – Succession Plan – Buy/Sell Agreement – Funding• Marital Dissolution - Owner Disputes Pharr Valuation & Business Services, LLC 16
  17. 17. 5 Major Points1. Why Me2. What It Is (What It “Ain’t”)3. Why You May Need it4. Business Valuation Overview5. Case Studies Pharr Valuation & Business Services, LLC 17
  18. 18. Dan PharrPharr Valuation & Business Services, LLC2720 Newquay LaneRichmond, VA 23236-1362Office: 804-332-5458 Cell: 804-370-3040Email: Dan@PharrValuation.comWebsite: www.PharrValuation.com Pharr Valuation & Business Services, LLC 18

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