Valuations

 

CONFIDENTAL       LAKEY OFFSHORE – Confidential Business Valuation Service

 

Lakey offer a Business Valuation Service to provide a likely sale value of a business. As a long-stablished business broker in Jersey we are constantly involved in helping people to buy and sell businesses and as such are aware of the market dynamics.

Besides helping an owner form a judgement of the price to ask for the business, our written valuation can be used as a support document from an independent party (and to evidence a figure has not been “plucked from the air”)

There is no requirement to use Lakey as the sales agent to sell the business, this is a separate service.

Values are dependent on various aspects and are a judgement, not a mathematical calculation. This is not a Balance Sheet valuation of Net Worth with an accountant’s eye, but one where the accounts have a material effect as a part of many considerations. To take an obvious example – the same business would have a different market value in the middle of the recent pandemic than it would have had before anyone knew of that looming crisis (for most it had a negative affect but, there were some business worth more as a result of the pandemic).

Every purchase involves an element of emotion as well as consideration of the facts, and this, is why the saying “it’s worth what someone will pay for it” has evolved.

Examples of Issues Affecting Valuations

Profitability and trends

Turnover and growth over the years

Market sector desirability

Potential for expansion or diversification

Management in place

Assets deployed and their condition

Potential Liabilities – e.g. leases and staff

Sources of Supply for products/services

Economics: e.g. availability of finance/size of operation

Cash generation

Quality of customer base

Spread of customers by size

History of bad debts

Recurring income elements

The envisaged structure of a sale – any deferred or earn out terms

The timing/urgency for a Sale

 

The Process

Lakey would require to meet with the owners/managers who are involved in the exercise and aware of the possibility of a sale. Lakey would need access to at least 3 years full trading accounts and information concerning the assets and stock of the business.

This is a fully confidential service and to ensure relevance it is important that Lakey gets a full disclosure of problems and liabilities, which would not necessarily be specifically mentioned in the report.

Information on staff and management is often crucial to an incoming investor. A tour of all premises involved in the potential sale is highly desirable. Further information such as customer feedback and presence on social media etc is also valuable.

 

Fees

The Lakey fee for this service is set at £1,000 to cover the above process and the report. For a small simple business, this fee is reduced to £500.