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Business Evaluation for Training Company

Client: Training Company

Project: Business Valuation

Situation

Our client runs a Victorian based registered training company, which was growing.

We were requested to help them establish a value for the business so that they could then sell part of it (around 10% to 20%) to a valuable employee, whom the client wanted to encourage to stay and help grow the business.

Task

Our role in this assignment was:

  • To establish a valuation for the existing business
  • To show the directors what actions that could be taken to increase the value of the business

 

Action Taken
  • We worked on this project with Mike Williams, one of our Associates
  • We modelled the current performance of the business
  • We helped the directors to better understand the level of risk and return that the business was subject to, and established the value of the business using P/E multiples and Discounted Cash Flow techniques
  • We helped the directors to understand what the possible future customer market potential for the product produced by the business might be, to consider which actions they could take that would seriously increase the value of their business
Outcome
  • We established a valuation for the business as it is today. Let's say an amount A$ X.
  • We showed the directors what factors were influencing the valuation and helped to understand the knock on impact that the Global Financial Crisis was having on the value of the business.
  • The directors were then able to conduct successful negotiations with the key employee.



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