How to Value a
Canadian Business
Certified business valuation and appraisal by Eric Jordan, CPPA. Defensible Fair Market Value reports for sale, divorce, CRA, litigation, and shareholder disputes delivered across Canada.
28 years of owner-operator calibrated experience since 1998 • Available 24/7 Canada-wide
Valuation and Appraisal Is Our Full-Time Business
No computer program, gross sales rule of thumb, or industry multiple can determine the real value of your business. Valuation and appraisal is what we do and we approach every engagement from four distinct viewpoints to ensure nothing is missed.
We take the numbers from your existing accountant and find the real "Normalized Net Income" through a proprietary process. Tax returns are optimized for the CRA not for valuation.
We assess risk to the buyer from an insurance perspective lease terms, industry trends, competition, regulation, staffing, succession, and operational vulnerabilities.
We assess the value of the people involved in the business from the owner's irreplaceable role to the depth of the trained workforce that stays after a sale.
We identify and estimate the intellectual property and proprietary knowledge that transfers with the business. Change of ownership and management always matters and we measure how much.
Valuations for Every Purpose
The Intake Conference
This is a 2–3 hour conference call that can include as many stakeholders as required. As no two businesses are the same, the questions will vary. Below are the key areas we will cover.
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1Why: What is the purpose of the valuation? Sale, divorce, CRA, dispute, litigation, or succession planning the purpose shapes the analysis.
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2Who: Value with whom owning and managing the business?
- Your current value with current ownership and management?
- Value with a new owner with less experience?
- Value with a buyer similar to you?
- Value with an upscale buyer who can build on what you've accomplished?
- These "who" questions make a significant difference to the final appraisal.
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3Normalized Net Income: The real earnings figure is seldom what appears in year-end accounting, which is optimized to minimize tax not to reflect true earning power.
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4Leasehold Improvements: Must be covered whether the building is leased or owned. The right questions must be asked in any comprehensive appraisal.
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5Hard Assets: Determining fair market value not book value, which has no bearing on what assets are actually worth.
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6Intellectual Property: Copyrights, proprietary processes, and business operation manuals.
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7Value of Cash Flow: Calculated by finding the normalized net income and multiplying it by a ratio determined by risk, opportunity, and the intellectual property that supports the ability to produce that cash flow.
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8Soft Assets: Intellectual property that has fair market cash value outside of the business.
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9Risk: No appraisal can be completed without properly understanding risk.
Why No Formula Can Replace This Process
No computer program, gross sales rule of thumb, or industry multiple can determine the real value of your business.
Valuation and appraisal is our full-time business and experience is what determines what matters most for your specific situation.
Speak Directly With the Business Valuator
Toll-free & available 24/7 • Canada-wide • Free consultation
Expert Witness • Canada