Discussion:Vlaution of A Consulting Engineering Company
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Discussion Forum Index --> Accounting Questions --> Vlaution of A Consulting Engineering Company
Mcfarlintax (talk|edits) said: | 23 June 2009 |
| I have been approached form my client who is an environmental consulting engineering company who in turn has been approached from a larger consulting engineering company to buy him out.
This business is a start up since October. The business has three consulting engineers that can bill their time and an administrator that can bill some of her time. The only capital is human and therefore the business doesn't have any tangle property, etc. Does anyone have any suggestions or ideas how we could arrive at the value for this business? | |
| June 23, 2009 | |
| And a startup since Oct? How can you possibly value that? I'd be dropping a dime to Troy Patton right now, frankly. Well, his dime, 800# or email...so you're client is supposed to come up with a number?
The only thing even imaginable would be to use projected cash flows for 3-5 years...but that's not worth much to real people. Way too many variables...do they have the clients? Under contract? What if the client leaves? What if the service providers leave? Or die? Or go start another company for less to provide the same service to the same client, putting your principle out of biz? Etc. | |
| 25 June 2009 | |
| What does this small company have, some valuable contract? Is the big company buying them for this contract? Something does not make sense here, other than perhaps Mr. Big, Inc. has some money, and they just want to spend it. | |
RoyDaleOne (talk|edits) said: | 25 June 2009 |
| Hire a professional, skilled in valuing businesses. | |
| 18 July 2009 | |
| Mcfarlintax,
Business Valuation Resources, maintains a Business Valuation Library of articles published in BV Update and BV Review that provide great information about valuing start-up companies. I suggest that you search their historical articles databse for "Start-Ups." You should find a bunch of results, and you can buy the articls for about $20 each. The articles cover everything from different methodologies to methods that have been accepted by the courts. The website is http://www.bvlibrary.com/Search.aspx . If you still find the task difficult, the firm I work for could most likely handle the appraisal. Hope that helps. Josh | |
