The copyrighted and proprietary Eric Jordan “25 Factors Affecting Business Valuation” methodology is strong and accurate.
So accurate that when combined with OUR NEW IN-HOUSE MARKETING METHODOLOGY can expect to sell your business almost 100% of the time at or near 100% of our valuation price.
(We have past and ongoing proof)
WE SOLVE
Partnership Disputes, Divorce Issues, Purchase and Sale Values, Share Value, CRA Section 86 Estate Freeze, Section 85 Rollover.
Income Valuations - Expropriation
A business that can be financed is a business that can be sold.
WE HAVE MANY EXAMPLES WHERE CLIENTS USING OUR VALUATION REPORTS RECEIVE 85% FINANCING AT THE LOWEST RATES POSSIBLE. NOT POSSIBLE WITH MOST OTHER VALUATION REPORTS.
THERE ARE MAJOR FLAWS IN VALUATIONS PRODUCED BY MARKET APPROACH, ASSET APPROACH, OR INCOME APPROACH.
DO YOU WANT TO RISK LOSING NOT ONLY YOUR VALUATION FEE BUT ALSO YOUR COURT CASE?
I will lead with an example and how "market approach" could be harmful:
We recently did a business valuation required by RBC to finance a large well established restaurant and lounge in a large
Canadian city. The sale price was $575,000 but the value we found was over a million dollars or almost double.
This happened because the seller was in a "forced sale position." This was not a "fair market value" sale.
This sale price data should never be used for a comparable sale but you can be sure this price data is being used and unscrupulous agents and buyers could use this and other data that is not "fair market value" to try and bully sellers into accepting below market offers.
FAIR MARKET VALUE DEFINITION:
The price expressed in money that a knowledgeable buyer and seller would agree upon with both parties having reasonable knowledge of the facts; acting in their own interests, and neither being under any pressure to buy or to sell.
MARKET APPROACH
99% of the time when Canadian business valuators use Market Approach in private company sales they rely on sale price data that SHOULD NEVER BE USED. I have never, not even once found private sale price data to include any proof that the seller was not under pressure to sell. There are no doubt some cases, but which ones and what percentage? A valuator must be in compliance with the legal definition of "fair market value" regarding "NEITHER BUYER OR SELLER BEING UNDER PRESSURE TO BUY OR SELL"
Unless a valuator can reasonably prove the private seller is not under pressure to sell the data and comparable sale value must not be used under Canadian and International law.
Any business valuation report in Canada or anywhere else that mentions "market approach" should be challenged because this is an accounting term from the1975 era and for the reason above is highly unreliable and subject to fraud and misrepresentation.
Any business valuation report in Canada or anywhere else that mentions "asset approach" should be challenged because this is an accounting term from the 1975 era and is not a legally entrenched term in Canada or anywhere else. Tangible assets are entrenched in law but they are only a small percentage of the total assets of a business. For S&P 500 companies tangible assets are only 10% of value.
Who would want their company valued based on 10% of the asset base. SEE OCEAN TOMO REPORT.
Brokers and others are almost always referring to balance sheet assets
They sometimes include "goodwill" meaning the value amount another business was purchased for, but there has in the past been no methodology to identify, measure, weight, or put a dollar value estimate on intangible assets, even when intangible assets regularly make up to ninety percent of private company value.
The term "asset approach" is a made-up accounting term is not entrenched in Canada or anywhere else for business valuation.
Canadian Venture Capitalist Mark D Wiseman, working with the Canadian Pension Plan, valued a block of shares of a company that had financial statements showing huge losses (SKYPE), and purchased that block at $300 MILLION USD. Mark D Wiseman was also instrumental in selling that same block of shares for well over a BILLION USD two years later. BILLION DOLLAR CANADIAN PROFIT FOR THE CANADA PENSION PLAN.
That day in 2009 was the day when accounting based valuators had their income approach methodology turned on its head. THOSE VALUATORS USING INCOME APPROACH WOULD HAVE PASSED ON THE OPPORTUNITY TO MAKE CPP A BILLION CDN.
The Eric Jordan "25 Factors Affecting Business Valuation" methodology follows the Venture Capitalist model.
(1) The hard asset approach to business valuation was proven wrong and outdated as hard assets are a very small percentage of the average company value and especially by 2020. Skype had few hard assets.
(2) The income approach to business valuation they used was proven not well supported, misleading, and wildly inaccurate. Skype had negative income.
(3) The market approach to business valuation shows valuators even today (2023) are relying mainly on unverified, inadequate, incomplete, and misleading private company sale data.
We show what this is on our main website www.pin.ca
WE HAVE IT AND THEY DON'T
VALUATIONS SO ACCURATE THEY CAN REVEAL
WHO WOULD BUY YOUR BUSINESS
EVEN WHEN IT IS NOT FOR SALE.
UNIQUE ACCURATE, AND CONFIRMED BY AI
Our valuations, in many cases, can identify the profile of the entity who would buy your business, the process of finding that profile, and an estimate of how long and how much it would cost to find them.
MISLEADING AND FRAUDULENT VALUATIONS ARE A MAJOR CONCERN
98% of accountants DO NOT do business valuations and are trustworthy.
The problem is within the 2% who think they are qualified to do business valuations without adequate small business experience, methodology and perhaps lacking professional judgement. Then there are Business Brokers and Real Estate Agents.
Suspected Fraud Example in 2023:
My Valuation Report was for $2.7 Million
The client wanted a lower number that I could not honestly provide
The client then went "appraisal shopping" and found someone "certified" willing to use incomplete and outdated market, hard asset, and income approaches from the 1970's to find a value 38.19% lower than mine.
IS THIS FRAUD if presented to the partner or ex wife in isolation while hiding the existence of my valuation?
You can see the problem.
If you are in a divorce or partner situation, or you want to buy a business, you may want to have this done right the first time.
Obtain a professional business valuation in Canada, priced between $1,500 and $15,000.
This service is essential for business sales, purchases, partnership disputes, share value determination, and tax-related needs such as CRA compliance, Section 86 estate freezes, and Section 85 rollovers. It also supports divorce settlements with accurate appraisals in line with the Canadian Income Tax Act, including full consideration of all intangible assets.