Archive 2012-52: Valuation of Small Businesses




Archive 2012-52: Valuation of Small Businesses: How to be Efficient and Deal with Key Issues

**Webinar 52 Broadcast Date: August 1, 2012**

presented by:

Mark Kucik, CPA, CVA, CM&AA, Moderator with Lari Masten, MSA, CPA, ABV, CFF, CVA, ABAR, and Mark Hanson, CPA/ABV, CVA

Valuing small businesses (less than $2 million in value) is not easy. You will learn how to prepare and report on these valuations in an efficient manner.
You will also learn the issues that are unique to small businesses including: practice and personal goodwill, key person, noncompete agreements,
marketability, liquidity and transferability, divorce, compensation, pass through entities, information challenges, and valuation approaches and

Webinar Outline:

Efficiencies in valuing small businesses

  • Purpose of the valuation
  • The audience for the valuation
  • Reports and level of content
  • The use of short-cuts
  • Financial information and adjustments

Information and data challenges

  • Divorce issues
  • When is too little data and access too little for a valuation opinion
  • Valuation vs. forensic services

Valuation approaches and methods and levels of reliance

  • Guideline public company method – automatic rejection?
  • Guideline company transaction method including data constraints and level of reliance – primary vs. corroborating and the statistical technique vs. rule
    of thumb
  • Income approach including to whether to DCF or not to DCF, the rate of return issues (equity vs. WACC), the weighting of historical earnings and the
    specific company risk methods.

  • Net asset approach and when it applies
  • Buying a job values

Normalization adjustments

  • Compensation adjustments including who should do it and sources of information and reliability.
  • Perks
  • Control vs. minority
  • Taxes
  • Depreciation
  • Working capital
  • Non-operating assets

Goodwill issues

  • Quantitative methods
  • Qualitative methods, e.g. Multi-attribute Utility Model

  • Saleable vs. unsalable personal goodwill
  • Noncompetes as proxies
  • Key person issues in small practices
  • Excess earnings problems – Is there any goodwill if there are no excess earnings

Pass through entities

  • Taxes or no taxes
  • Adjustments
  • Minority vs. control


  • Marketability vs. liquidity vs. transferability
  • Minority vs. control

Learning Objectives:

  • The participant will learn how to apply efficiencies in valuing small businesses (less than $2 million in value)
  • The participant will learn the issues that can make valuations of small businesses more difficult than larger businesses
  • The participant will learn how to deal with personal goodwill (saleable and unsalable) vs. enterprise goodwill vs. key person vs. noncompete agreements
  • The participant will learn about potential information and data challenges
  • The participant will learn about what valuation approaches and methods work and those that don’t
  • The participant will learn about dealing with normalization adjustments including non-market compensation issues
  • The participant will learn about tax affecting pass through entities
  • The participant will learn about key divorce issues
  • The participant will learn about liquidity, marketability and transferability issues


  • Webinar PowerPoint slides
  • Following the webinar, attendees will receive a webinar transcript along with an interactive video of the webinar showing the audio synced to the slide
    presentation in real time

Included in this downloadable package are:

  • Audio/Video file
  • Webinar transcript
  • Original Webinar handouts

The archived webinar package is an Adobe Presenter PDF file that allows you to view the video of the webinar with the synced audio so that you see the presentation just as it was presented “live.” The Presenter format also allows for easy navigation through the webinar so you can quickly go to a specific section in the presentation. The handout materials are included in the file. To view the Webinar Presenter file, you must have Adobe Reader software version 9 or higher. You can download the free current version of Adobe Reader at Please note that CPE is only available for live webinar broadcasts.

Additional information

Weight 0.00 oz