Business Brokers of Austin, Texas

VR Mergers & Acquisitions / VR Business Brokers located in Austin, Texas

 
What Is Your Austin-Area Business Worth?

Though a full-scope business appraisal can cost thousands of dollars, VR Mergers & Acquisitions / VR Business Brokers offers a free estimate of the value of your business. Every Central Texas business owner wonders what their business is worth. VR has correctly valued tens of thousands of businesses since 1979. Please contact our Austin business brokers for a no-obligation estimate of the value of your business.

When you work with Austin's VR Mergers & Acquisitions / VR Business Brokers to develop a valuation report, the goal is a simple one: the creation of an accurate and comprehensive document that will stand up to scrutiny. You will receive a professional business valuation that becomes your best tool to obtain maximum selling price. Without a professional valuation, a business owner must be prepared to defend his opinion of the value of his business.

VR's depth of experience in the Austin area, coupled with a vast knowledge of valuation, will result in an expert opinion of value, delivered in a responsive, timely and efficient manner. VR Mergers & Acquisitions / VR Business Brokers has valued and sold virtually every type of business.

Small and mid-sized businesses in Central Texas typically depend on four key value factors:

  • Seller's Discretionary Earnings (SDE)
  • Risk
  • Terms of the Sale
  • Industry

Seller's Discretionary Earnings
The main factor of determining value for small and mid-sized businesses is the total cash flow benefiting the owner - also known as Seller's Discretionary Earnings (SDE). SDE is calculated using the following six categories:

  1. Profit or loss as reported
  2. Owner's Salary
  3. Discretionary Expenses
  4. Non-recurring Expenses
  5. Non-cash Expenses
  6. Expenses not included in the P&L

Once these categories are added together and an SDE is developed, a multiplier is applied. The multiplier can range from 1 to 5 (or more), depending on many factors, to arrive at the appropriate value for the business.

Risk
The second valuation factor is the level of risk. Factors in this category include:

  • Years in business and with the current owner
  • Profit trend
  • Quality of books and records
  • Franchise membership
  • Brand recognition/ strength
  • Level of competition
  • Dependence on current owner
  • Diversification of customer base
  • Lease length and terms
  • Asset value

Terms of the Sale
This is the one source of value that the Austin business seller can almost completely control. Components of the terms include:

  • Down payment
  • Interest rate
  • Monthly payment
  • Non-compete agreement
  • Seller training of buyer

In most business sales in Central Texas, the seller provides some level of financing to the buyer of the business. With seller financing, the seller receives part of the purchase price at the time of the sale ("the down payment") and the remainder over several years. The buyer uses the cash flow from the business to pay off the debt. Structuring a sale with attractive terms can significantly increase the value of a business.

Industry
Some businesses have a valuation equal to the seller's discretionary earnings (SDE) while other businesses are valued at five (or more) times that amount. An important reason in determining the multiple of SDE is the industry which the business is part of. Certain industries are more desirable than others. Factors influencing desirability include:

  • The fun & ease of operating the business
  • Location
  • Facilities
  • Employee relations
  • Operating hours
  • Growth potential

Valuing Your Business
To estimate the value of your business, we will consider all these factors, the selling prices of comparable businesses in Travis, Williamson and Hays counties, as well as any other factors unique to your particular business that may make it more valuable. contact VR Mergers & Acquisitions / VR Business Brokers located in Austin, Texas for a no-obligation business valuation.


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Each office is
independently owned
and operated

Our office is owned by

Derrick  Business  Group , Inc.

3445 Executive Center Drive, Suite 251
Austin, TX 78731

Phone 512 - 340 - 0181

Fax 512 - 340 - 0182
E-mail Us