Gather Information for Business Valuation
Business brokers and sophisticated business buyers may use intrinsic valuation techniques for business valuation. They will project the free cash flow (FCF) from the business for the next few years and discount the cash flow projections to determine the intrinsic value. Additionally, business buyers will also try and estimate the value of a business by looking at values of similar businesses sold locally.
Selling a business is complex and the seller must take the time to plan and organize the exit. To assist with valuation and eventual sale, businesses need the following information.
- Balance sheet, income statement and cash flow statement for 3 to 5 years
- Corporate tax returns for 3 to 5 years
- Value of inventory
- List of capital expenses on fixtures and equipment
- Customer and contact lists (Customer of Contact Management System)
- List of employees
- Copies of all leases, franchise agreements (if applicable)