Long Island Accountants Diapoules & Feinstein CPAs P.C. Discuss Placing Value on a Business

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Long Island Accountants Diapoules & Feinstein CPAs P.C. offer their remarks in response to an article released by SME Web discussing the factors that are important to consider when attempting to place a value on a business.

On March 27, Long Island Accountants Diapoules & Feinstein CPAs P.C. issue a response to an article released by SME Web discussing the factors that are important to consider when attempting to place value on a business.

The SME Web article discusses various factors to consider in order to fairly and accurately value a business. The factors are stated to be a complex series of calculations and determining an assessment of value that is agreeable to both buying and selling parties.

Determining the value of a business is reported to be largely a factor attributed to timing and uncontrollable factors. Timing is given its importance because a lot of external variables, like market conditions, have periods of unpredictable fluctuation.

Among manageable factors, the article mentions that a business’ dependency on customers and suppliers can vary depending upon how heavily invested a business is in relatively few customers and suppliers or how secure the business is with variety. Accordingly, a history of stability is also cited as a positive attribute while inconsistency can be a threatening liability.

The article states that placing value on reputation, relationships, and intellectual property can be difficult to account for. The article lists other features of a business such as location and capital as additional factors to consider. Despite the unpredictable factors, the business is offered time to prove it’s assessed worth to facilitate a stronger feeling of agreement between selling and buying parties.

Jim Diapoules of the Long Island Accountants Diapoules & Feinstein CPA P.C. offers his own input on valuating a business operation. “Valuing a business is a subjective matter and during the sale of a business it is often difficult for the two parties involved to agree on. Placing a value on a business entity does indeed require the factoring in of many variables. There will always be inherent risk when a business changes hands and there is never any guarantee. However, crunching numbers in the right way with a focus on the correct business keys can often help someone make the acquisition of a business at the proper price and be a little less nerve racking.”

Diapoules & Feinstein CPAs P.C. have been providing accounting, auditing and tax services to the Greater New York City area since 1989. D&F provides our clients with great personal attention and years of professional experience in order to see them succeed and help them to feel confident.

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Jim Diapoules
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