Is there just one method of figuring out the value of a business?

By Chuck Roberts
December 02, 2016

It depends on the nature of the business enterprise itself as to what ultimately is going to be the appropriate mechanism to come up with an opinion of value. In almost every situation, business valuation experts consider maybe five, six, maybe seven different methodologies. They’ll consider each one. Their written report is going to articulate the different methodologies that were considered, explain why those methods were either a good choice or a bad choice or appropriate or they didn’t fit, and will set forth ultimately the valuation model that was used.

What we’re trying to get to with the valuation effort is come up with a fair cash market value with a business enterprise. That’s often described as the amount of money that a willing buyer would pay a willing seller in an arm-sling situation where neither side is operating under any kind of compulsion or duress. That means, what’s the fair value of it? Not a value for sale purposes or value strictly for divorce purposes, but the actual fair cash market value of the interest that’s owned by the family unit.

Chuck Roberts is family lawyer at Momkus McCluskey Roberts, LLC, one of the largest law firms in DuPage County, Illinois.

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December 02, 2016
Categories:  FAQs

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