Business Valuation

As a business owner or leader, do you have a strong understanding of the business’s value? Do you know the value you created in the past year? Can you identify which areas/segments of your business are generating the most value? If the answer to any of these questions is “NO” you could be putting the future of your business at serious risk. Moreover, knowing the true fair value of your business makes strategic sense if you are looking at any one of the following:

• Joint ventures or strategic partnerships
• Business restructuring
• Mergers and acquisitions
• Securing private financing in the form of equity
• Planning an exit strategy
• Passing on your business to a family member or members

To achieve the above and provide a more comprehensive and realistic valuation, at EMCS we developed our own approach to the valuation exercises that goes beyond just reviewing the past financial statements. We start by looking at external factors such as the general economy and the industry performance the company operates in. Following this external analysis, we then turn our eye towards the key components making up the business, such as the business structures, the business governance and the internal capability for strategy formulation. We conclude this part of the analysis by summarising everything in a SWOT analysis that serves as foundation for the business valuation.

Thus, our approach to a valuation exercise emphasises a close analysis of your any business’s most important value drivers and those characteristics that make a business unique, be it the quality of leadership to pricing power to brand equity. We believe that a thorough and honest appraisal of these value drivers is essential to calculating a company’s value. This means that our approach includes an appreciation of the qualitative aspects of a business which most other valuation methods ignore.