Marine Business Valuations
Business valuation is a process and set of procedures that are used to estimate the economic value of an owner’s interest in a business. It can provide either a point-in-time assessment of value or indicate the price a willing buyer might be prepared to pay to acquire a business in the future. Valuations are performed for a myriad of reasons, including but certainly not limited to selling or acquiring a business.
The appraisal of value however is somewhat of an art form and not an exact science. Each party involved in a transaction whether a private individual, trade buyer, venture investor, accountant or lending institution will generally have different approaches, objectives, interests, experience and information available to them. Because of this results can differ wildly with values ranging from the sublime to the ridiculous in relation to marine businesses!
This is generally because of the lack of sector understanding, experience and insight of practitioners coupled with an absence of a consistently applied methodology and comparable deal data. Without access to specific ‘business type’ methodologies (for example the valuation method for boat dealerships) and comprehensive transaction data, it is simply not possible to obtain sound advice and a likely value range achievable.
Marine & Maritime Valuation Standards.
Marine & Maritime industry valuation standards (which have proved overtime to be a reliable guide with a +90% average accuracy rate) overcome the challenges involved in building trust and reliability in marine business appraisals, ensuring owners can have confidence in results.
Backed by a proprietary marine specific ‘value matrix’ which enables price adjustments to be made after normalising trading accounts and a market leading ‘comparables index’ (a database of marine transactions of all types and sizes of deals), Marine & Maritime is able to accurately calculate enterprise value and source market multiples for both asset based (on and off-balance sheet) and profit based valuations.
Consistently applying, benchmarking and reviewing these standards to every marine business by type, size, profile and location is key. Marine & Maritime can also provide comment on market sentiment based on tangible evidence of what values investors are paying influenced by demand. Some businesses coming to the market will already have a long list of potential buyers seeking such an opportunity, which needs to be factored into pricing strategy.
Investment in an informed and accurate business appraisal, obtaining expert advice, having realistic and achievable expectations and agreeing campaign strategy all helps to de-risk a transaction.
If you are looking for valuation support on a marine business sale our industry leading business appraisal service is carried out sensitively and confidentially and offers a proven framework designed to help maximise value, achieve a competitive edge in the market and obtain advice and support in preparing a business for sale. We help owners understand what their marine business is worth (likely value achievable), what supports and drives that value, how marketable it might be, what demand there might be and what the profile of buyer will most likely be.