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Value

“The value of all wares arise from their use; things of no use have no value, as the English phrase is, they are good for nothing”

Nicholas Barbon 1690

“Value is the representation of all future benefits of ownership, compressed into a single payment. Value is continually changing as expected future benefits increase or decrease with the passage of time. As a result, an opinion of value can only be expressed relative to a given moment, or “as of” a specific date”

Peter Hays and Gary McLoughlin “Corporate Business Valuations”

2019-11-01T11:15:41+13:00November 1st, 2019|

Professional Goodwill

“In his analysis of goodwill Scruton LJ in Whiteman Smith Motor Co v. Chaplin likened the analysis of a client base to the “cat, rat and dog”. The cat prefers the old home to the person, the dog represents that part of the client who follows the person rather than the place, and the rat follows neither and drinks elsewhere. Arguably there is a further creature which should be added to the managerie, the donkey, which is the practitioner, or the advisor, who simply believes that the value of goodwill can be determined by a rule of thumb.

A professional service firm is a business, and its value should be subject to the same criteria as those which apply to other commercial undertakings.”

Wayne Lonergan “The Valuation of Businesses, Shares and Other Equity”

2019-11-04T21:17:34+13:00November 1st, 2019|

Industry Benchmark

There can be no substitute for applying rational, justifiable valuation criteria to the valuation of any business. Following this, one stands back and considers whether the result is reasonable, is it consistent with the market place. Sometimes with the industry benchmarks one will then acknowledge that the market will pay more or less based on known practices. If one can be confident that the market will accept the benchmark, or “Rule of thumb” value then at the end of the day that may well be the value”

A R Burn “Practical Small Business Valuations”

2019-11-01T09:57:43+13:00November 1st, 2019|