Commercial Business Lease

Business appraisal is the first step to buying or selling a commercial enterprise. An appraisal must be done to set a starting price for the transaction.

Getting the Business Appraised

Generally, an agent will use one or more of five standard appraisal methods to determine the worth of the company. For example, an agent may look at the historical earnings of the company and the profits reported by the owner-operator. An agent might also look at the assets the company has, project future earnings based on the current business model, or calculate worth based on the profits the company makes before taxes, interest and amortization. The detail in which the valuation is made will determine the cost of the service.

After the business has been appraised and the price has been determined by both the seller and the buyer (and their representatives) the buyer needs to find out how best to finance the purchase. One way is to get a small business loan. Another option is leasing. If the deal is an acquisition, as opposed to a first business, the transaction can be financed by selling or leasing the redundant assets of the acquired company. Finally, a buyer with enough capital can buy the company outright, although many analysts recommend using that capital for other purposes.

RPI Commercial can help both buyers and sellers. This full-service company offers appraisal services, design help and other support in addition to brokerage. Questions can be addressed to info@rpicommercial.com or called in to 1-877-549-5210.