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Why are company or business valuations necessary?
A business valuation seeks to accurately quantify future income, or more correctly, future maintainable earning and then quantifies the risk to maintaining that income. Therefore, a company valuation or business valuation involves a completely different process to a property valuation.
Company valuation compared to property valuation
When a buyer purchases real property (land and buildings) there is a guarantee of tenure and a physical asset. However when purchasing a business, a buyer often may receive no physical assets and the tenure will only be as strong as the current lease (if in fact a lease is being made available).
The concept of business valuation is therefore fundamentally different from property valuation or house valuation, where either a direct comparison to recent sales or a comparison to income yields is generally used to determine value.
In fact, the very nature of the competitive business environment means that it is only rarely possible to compare a business to like businesses in a comparable locality and so business valuers must use different but objective and consistent methodologies when completing a company valuation or commercial valuations.
The issues that precipitate the need for a company valuation include
The types of business typically valued by Propell National Valuers include (but are not limited to) child care centres, service stations, motels, hotels/pubs, quarries, restaurants, newsagencies and professional practices.
As experts in property, commercial and company valuations Australia-wide, Propell Valuers are the team to turn to, to ensure your next investment is the right investment.