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EVA Business Valuation Model

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The EVA Business Valuation Model converts a process that is typically more akin to an ‘art form’ into a ‘mathematical science’ where all the assumptions can be clearly identified, justified, and agreed. When exploring how to value a small business there are seven potential valuation models, some may be relevant to a greater or lesser extend depending on the buyer’s objectives and constraints, the profile of the business and the preferred deal structure.

Typical Use: To establish a logical business valuation using a combination of up to seven different valuation models to deliver a blended valuation for any business based on their recent trading history and projected future performance.

An Understandable, Explainable Valuation: There is nothing worse than two professionals with a difference of opinion for undermining client confidence. By using standard valuation techniques and input assumptions that can be discussed, amended, and agreed, the process of valuing a business becomes, quick, easy and painless, without diminishing the value of the exercise.

EVA provides the tool you need to support your clients through the entire process from financial due diligence to helping them achieve a desired valuation on exit, ensuring they can live the life they want to live without the fear of ever running out of money. Proving yourself invaluable to your clients, not only that you can shaves days off the traditional process. You can also ensure your clients aren’t one of the 99.5% of business that start-up and fail to exit successfully.

We know all clients are different and you need an approach which is flexible enough to enable you to support them, regardless of their circumstances. Whether you need to support your clients on an individual project or provide ongoing client support to work towards a desired exit valuation. EVA has a package for you.

Cliff Spolander of Business By Design outlines the benefits of the EVA model.

EVA for Buyers (£999)

Everything you need to assess the financial viability of a business, calculate an appropriate valuation, and prepare a business plan post purchase.

  • Financial DD
  • Detailed Valuation Model
  • Performance Trend Report
  • Customer Analysis
  • Supplier Analysis
  • Client Segmentation Model
  • EVA Forecast Model

EVA for Sellers (£799)

Assess a business in the eyes of a prospective buyer, value the business and provide all the financial information a prospective buyer would require.

  • Financial DD
  • Detailed Valuation Model
  • Customer Analysis
  • Supplier Analysis
  • Monthly Management Accounts
  • EVA Forecast Model

EVA for Valuers (£499)

Drastically reduce the time it takes to prepare a detailed business valuation with all the information you need at the click of a button.

  • Financial DD
  • Business Overview
  • Detailed Valuation Model
  • Performance Trend Report
  • Customer Analysis
  • Supplier Analysis
  • Monthly Management Accounts

If you would like to discuss implementing EVA with your clients, please click here and let’s talk.

Grow & Exit

£100 per connection per month (minimum 12 month commitment)

The VFD Pro Grow & Exit connection type provides you with access to the entire suite of VFD Pro suite. Now you can work with your clients on a monthly basis, with all associated enhanced performance reports and strategic planning models, to ensure your clients achieve their desired exit.

How do you value a small business?

The EVA Suite includes up to 7 different approaches to business valuation. These approaches are used to objectively determine the value of a small business based on its current financial performance trends. Here is a brief explanation of each approach:

Market Multiple Method: This method determines the value of a business by comparing it to similar businesses in the market. Key financial metrics such as revenue, earnings, or cash flow multiples are used to calculate the business value.

Comparable Transaction Method: Similar to the market multiple method, this approach looks at recent transactions of comparable businesses to determine the value. It considers factors such as the sale price, deal structure, and financial performance of these comparable transactions.

Discounted Cash Flow (DCF) Method: The DCF method calculates the present value of future cash flows generated by the business. It takes into account the estimated future cash flows and applies a discount rate to reflect the risk and time value of money.

Asset-Based Approach: This approach determines the value of a business based on its assets and liabilities. It considers the net book value of the company’s tangible and intangible assets, including property, inventory, equipment, and intellectual property.

Earnings Capitalization Method: This method calculates the value of a business based on its future earnings potential. It considers the company’s historical earnings, projected earnings growth rate, and a capitalization rate to estimate the business value.

Earnings Multiple Method: Similar to the market multiple method, this approach uses a multiple of the company’s earnings, such as the price-to-earnings ratio, to determine the value of the business.

Balance Sheet Valuation: This approach values the business based on its net asset value. It compares the company’s total assets to its total liabilities to arrive at the net worth or equity value of the business.

It’s important to note that the EVA suite allows for flexibility in selecting and combining these valuation methodologies based on the nature of the business, sector, and other relevant factors. The valuation range generated using these methods helps provide an impartial and fact-based estimate that can assist clients in understanding the worth of their business.

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