Just curious, has anyone gone through the process of determining the value of a surveying company (either as the buyer or seller) and if so: a.) did you use one of the standard valuation formulas as a staring point; b.) which earnings metric did you use; and c.) what multiplier did you use.
From the little research I've done (just starting) it looks like most valuation consultants for professional services firms use SDE (Seller's Discretionary Earnings) and a multiplier in the 1-3 range for firms that gross less than a million and EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) with a multiplier of 3-5 for larger firms.
> Just curious, has anyone gone through the process of determining the value of a surveying company (either as the buyer or seller) and if so: a.) did you use one of the standard valuation formulas as a staring point; b.) which earnings metric did you use; and c.) what multiplier did you use.
>
> From the little research I've done (just starting) it looks like most valuation consultants for professional services firms use SDE (Seller's Discretionary Earnings) and a multiplier in the 1-3 range for firms that gross less than a million and EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) with a multiplier of 3-5 for larger firms.
It's very, very hard in todays economy to establish any value.
I recently valued my company and the other side had completly different numbers than I, we went back & forth alot.
Long story short, we came to terms, 65% of last 3 years average Net, $0.50 of each survey file and 50% cash at closing and seller to carry paper for 5 years, interest only & ballon.
These days I think you ask how much do I have to pay you to
take my survey practice.......
Seriously, go to a professional business seller. Suspect the demand to purchase small outfit would be low.
RADU
These days I think you ask how much do I have to pay you to
> Seriously, go to a professional business seller. Suspect the demand to purchase small outfit would be low.
It's early in the process (d@mn near hypothetical) but I'm a potential buyer, not a seller.
I Would Not Consider An Unknown
Unless I knew the surveyor/engineer the majority of my carreer I would not consider the purchase.
You know what a "Pig in a poke" is?
Paul in PA
Business Valuation IMWTK
> Just curious, has anyone gone through the process of determining the value of a surveying company (either as the buyer or seller) and if so: a.) did you use one of the standard valuation formulas as a staring point; b.) which earnings metric did you use; and c.) what multiplier did you use.
>
> From the little research I've done (just starting) it looks like most valuation consultants for professional services firms use SDE (Seller's Discretionary Earnings) and a multiplier in the 1-3 range for firms that gross less than a million and EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) with a multiplier of 3-5 for larger firms.
Inquiring minds want to know...
What did you end up using? What would you use if the transaction were today?
You need to get a professional to do it.
Had it done about 5-6 years ago, basically you hire an appraiser that specializes in business appraisals.
Then you have to feed him all the info, inventory, accounts receivables, and on and on.
He will then come up with a value at the time of the appraisal.
What I noticed was that if you took the last three years gross add them together and divide them by three you would have almost to the penny the value.
:-$
Some sage advice from Charlie Munger:
-”I think that, every time you saw the word EBITDA, you should substitute the word “bull****” earnings.”
-“Warren talks about these discounted cash flows. I’ve never seen him do one.” ”It’s true,” replied Buffett. “If the value of a company doesn’t just scream out at you, it’s too close.”
-”Practically everybody overweighs the stuff that can be numbered, because it yields to the statistical techniques they’re taught in academia, and doesn’t mix in the hard-to-measure stuff that may be more important. That is a mistake I’ve tried all my life to avoid, and I have no regrets for having done that.”
These days I think you ask how much do I have to pay you to
I made the mistake of buying a survey business in 1998. Didn't go so good, the value ended up negative and a two year lawsuit to prove the fraud of the seller. Hope your deal goes much better and the seller isn't a crook.
Care to run through a couple examples with different $ numbers? Maybe a low, middle, high?
> Care to run through a couple examples with different $ numbers? Maybe a low, middle, high?
Never mind. I just realized that your OP was 1104 days ago.
I thought this was an oddly encouraging thread in our current market.
Disregard.