This document provides a 17-step checklist for valuing a business, including collecting financial records, asset information, market data, and other commercial details. It recommends analyzing this information to understand factors like profit margins, stability, and income streams. The checklist also includes gathering data on staff, systems, intellectual property, suppliers, clients, products, IT assets, competition, and skills. Finally, it suggests selecting an appropriate valuation method from options like asset, market, rule of thumb, discounted cash flow, and future maintainable earnings valuations.

1. Checklist For Business Valuation
1. Know The Purpose Of Valuation:
You should know the purpose of valuing your business in the sense that either you
are valuing your business for legal purposes, boosting its value, buying it or selling
it.
Friday, 21 June 13

2. Checklist For Business Valuation
2. Collect Financial Information:
You need to collect the last three years of financial information, including Tax return
of the company, end of directors, Profit and Loss Statements, Balance Sheets and
Depreciation Statements.
Friday, 21 June 13

3. Checklist For Business Valuation
3. Assets Information:
Similarly, collect details of all major assets in use in the business and any valuations of
the assets and the real estate. Likewise, collect management accounts (Record of
Financial performance since the last figures), budget and performance to past budgets,
any profit/cash flow projections and detail of any contingent liabilities, e.g. legal
disputes, guarantees. Compile any maintenance agreements or lease agreements
pertaining to the plant and equipment.
Friday, 21 June 13

4. Checklist For Business Valuation
4. Collect Market Information:
You should firstly know which market your business is in and then know either that
market is growing, steady or shrinking. You also should know your business barriers,
competitors, types of customers, suppliers and market share that your business has.
Friday, 21 June 13

5. Checklist For Business Valuation
5. Collect Other Commercial Information:
Collect any particular licensing or regulatory requirements, e.g. health, safety etc. that is
performed in your business.
Friday, 21 June 13

6. Checklist For Business Valuation
6. Analysis The Information Collected:
In the assessing the information assembled consideration of the factors affecting value is
required. These factors include:
Profit Margin
- Low profit margin reflects higher risk and trends in margins may also be an indication of
the business life cycle and its future prospects.
- High profit margins can reflect the competitive environment in which the business
operates.
Stability
- A business with a track record of steady earnings is potentially a more reliable generator of
future income than a start-up business or one with unstable past.
Types of income streams
- Differentiate between one off transactions e.g. consulting/project business and regular
continuous streams of income that might come from regular clients.
Friday, 21 June 13

7. Checklist For Business Valuation
7. Staff:
- Complete a roster of staff including hours worked, skills required, wages, bonuses paid
etc.
- Any copies of staff contracts.
Friday, 21 June 13

8. Checklist For Business Valuation
8. Systems:
-Collect operations and training manuals.
-Detail systems within the business including software, sales systems.
Friday, 21 June 13

9. Checklist For Business Valuation
9. Intellectual Property:
Compile a list of intellectual property, including material which is Copyright, Trademarks,
Patents and Designs and other intellectual property.
Friday, 21 June 13

10. Checklist For Business Valuation
10. Suppliers:
Details of any supplier contracts or special arrangements.
Friday, 21 June 13

11. Checklist For Business Valuation
11. Clients:
Do a quick analysis of your client base noting size of your major clients and the percentage
of your sales that they represent.
Friday, 21 June 13

12. Checklist For Business Valuation
12. Franchise:
- If you are franchise make sure your franchise agreement and disclosure documents are
up-to-date.
- Make sure any franchise agreement have not lapsed and that all renewals are in process
in a timely way.
Friday, 21 June 13

13. Checklist For Business Valuation
13. Products and services:
Make a list of the products and services that you sell or provide.
Friday, 21 June 13

14. Checklist For Business Valuation
14. Information Technology:
Make of list of your IT assets including software that you use, accounts you have with cloud
based services and any other IT assets.
Friday, 21 June 13

15. Checklist For Business Valuation
15. Competition:
List your major competitor and the difference between services and products you provide.
Friday, 21 June 13

16. Checklist For Business Valuation
16. Other Information:
Collect other pieces of information that might affect business value such as:
- Skills required of management and staff
- Quality of management
- Industry Lifecycle
- Reliance on owner operator
Friday, 21 June 13

17. Checklist For Business Valuation
17. Select Appropriate Valuation Method:
Once all the above steps are completed. You can choose a appropriate calculation business
valuation methods from below:
- Asset Valuation Method
- Market Valuation Method
- Rule of Thumb Method
- Discounted Cash Flow Method
- Future Maintainable Earning Method
Friday, 21 June 13

18. MaximiseYour BusinessValue
For help in maximising
your business value take a look
at our product
http://bc.com.au/
maximise.html
Friday, 21 June 13

19. For Advice OnYour Buying Your Franchise
BCI Business Brokers
Tony Arena (Managing Director)
3/1 Alexander Street, Crows Nest, NSW, 2065
Phone: +61 2 9439 3399
Mobile: +61 411888148
Email: tarena@bc.com.au
Friday, 21 June 13

20. For More Information About
How ToValue A Business PleaseVisit Our Website
www.valueabusiness.com.au
Friday, 21 June 13