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Comprehensive Business Brokers (CBB) is a licensed user of the most reliable business valuation and small business sales comparables software in the industry. This allows CBB to calculate the highest, defendable selling price possible. This means more money for you and a fair price for buyers.
How the software works…
Since 1998, affiliates have gathered information on over 7,000 transactions from SBA lenders. Transactions are updated frequently and an average of 100 new comps are added each month. Participating SBA lenders are given access to the data for their internal use.
- The data has been filtered and cross-checked for inconsistencies, errors and identical transactions.
- Each transaction is categorized by NAICS code, industry classification or keyword, and typical financial variables for maximum search ability.
- All company names have been eliminated and replaced by keyword or industry classification for confidentiality.
What’s in the data?…
Each comparable transaction includes the following:
- Business type
- North American Industrial Classification System (NAICS) Code
- NAICS industry classification
- Enterprise or “asset” price (furniture, fixtures, equipment, inventory & goodwill)
- Transaction Date
- Revenue
- Seller’s Discretionary Earnings (SDE)
- Adjusted Earnings Before Interest, Taxes, Depreciation & Amortization (EBITDA)
- Assets (Inventory, Furniture, Fixtures & Equipment)
- Transaction price and associated multiples include normal fixed assets, normal inventory, and goodwill
How we go about valuing your business…
The Comprehensive Business Brokers valuation tool uses the following approaches:
Asset Approach – for asset intensive businesses and/or holding companies, the asset approach is sometimes used. It is typically calculated as adjusted assets less adjusted liabilities.
Market Approach – using the proprietary database, CBB can search for specific comparable transactions based on NAICS, revenue or profit size, keyword, and various other variables. The market approach uses a price to revenue, price to SDE, and price to EBITDA calculations. This method can be weighted when good comparable transactions are available.
Income Approach – the program uses a discounted future cash flow method starting with EBITDA and using a build-up discount / capitalization rate specific to EBITDA cash flow. The discount rate is based on risk variables that tend to have the most impact on values of small businesses.
By utilizing the data from your financial statements and adjusting for allowable items, CBB can come up with the best selling price for your business!