Author - Jean-Claude Desnoyers


The main approaches in business valuation

When you use the services of a Chartered Business Valuator (CBV), do you know what kind of work he will do to give you the most accurate assessment of the fair market value of a business? Do you have an idea of ​​the questions he asks himself, the decisions he has to make, and based on which factors? Depending on the business situation and available financial information, the CBV will choose one or more specific valuation methods to meet your [...]


How to estimate the value of an established business?

As an owner, you may need to determine the value of your business. If your business is established, and its sales/profits are stable or growing steadily, and you get it appraised by a Chartered Business Valuator (CBV), it is likely that he will be using a method called “Capitalization of Maintainable Earnings” to determine the fair market value of your business. This valuation method also bears other names such as capitalization of earnings method. In this method, the business’s past [...]

Principe 7

7 basic principles of business valuation : Principle 7

Principle nº 7: Absent a shareholders’ or other ownership agreement, or legislation or adjudicated legislative intent that dictates otherwise, the value of a controlling interest in a business may have a greater value per share than does a minority interest in that same business when each is viewed in isolation. The first 6 basic principles explained in the previous articles allowed the Chartered Business Valuator (CBV) to determine the total value of a business. The 7th principle, instead, revolves around [...]


Can I lease a business instead of buying it?

First, let’s take a look at some known facts. I’ve seen many examples in practice of leasing part of a business. A hotel, for example, could decide to lease their restaurant instead of operating it themselves. But, what about leasing the whole business? To answer the question, let’s break a business down to its assets. We could separate the operating assets of a business between the tangible assets and the intangible assets. Tangible and intangible assets First things first, let’s [...]


The 7 basic principles of business valuation : Principle 6

Principle nº 6 : Value is influenced by liquidity. The value of a business is influenced by its liquidity. Liquidity can refer to two concepts: How easy it is to sell a business and Liquidity of the assets in the business. In both cases, we refer to how easy it is to convert an asset into cash. In this article, we will discuss how easy, or not, it is to sell a business and the impact of this on its value. The liquidity of a business [...]


Increasing the value and profitability

Marketing Being a Chartered Business Valuator and a chartered professional accountant, I have specialized in determining the fair market value of a business. I’m then in a great position to define ways to increase the profitability of businesses and their value. When I talk to clients who want to increase the profitability of their business or its value, it is not unusual for them to be advised that: “to increase the profitability of your business and its value, you just [...]


The 7 basic principles of business valuation : Principle 5

Principe 5 : When the value is considered to be equal to the present value of all future benefits that the owner should accumulate, this value can have two distinct components: commercial (transferable) or non-commercial (or value to owner) value. The definition of fair market value refers, among other things, to the highest price that a buyer and a seller would be willing to transact. Without making any direct reference to it, it is clear that what interests a buyer is [...]


Planning a business transfer

Are you planning to transfer your business? You are planning to retire in the next two to five years and would like to make a smooth transition. It’s a great idea to plan. The transfer of a business has several aspects to consider in addition to the financial one. How to properly plan the transfer of a business? What aspects should be considered? I can tell you more about this by presenting some important avenues that sometimes seem to [...]


Plan to sell your business with a Chartered business valuator

You owned a business for several years? Have you started thinking about retirement? If so, are you among the 52% of entrepreneurs who do not have a retirement plan? You must rectify this situation. Your business was first a dream that you cultivated to make it what it is today. It is very important that your business continues to be successful even after you leave. In addition, it is imperative that you receive the right amount at the time [...]


The 7 basic principles of business valuation: Principle 4

Principle N° 4 : The higher the underlying net tangible asset value of a business, the higher should be the going concern value of that business. The fourth basic principle of business valuation tells us that the higher the company’s tangible net worth, the higher the operating value. Let’s start by defining what the net tangible value of a business is in terms of operating value. It is the value determined using the tangible asset backing calculation. In the financial statements, assets [...]