Business Valuations

RSI & Associates, Inc. has performed comprehensive and formal business valuations across the US, Canada and Mexico. Our valuations are prepared and certified by accredited appraisers. RSI is an authorized and preferred vender with many SBA guaranteed lenders. We articulate the complex legal and technical aspects of business valuations into a report that is clear, comprehensive and justifiable upon audit or in court proceedings. We provide our clients with a distinct awareness of the theories and techniques used in valuations so informed business and legal decisions can be made. We are proud of the depth and integrity of our research.

Equipment Appraisals

RSI Associates, Inc. has performed equipment (FF&E) appraisals, inventory appraisals, heavy equipment appraisals and aircraft appraisals for various purposes and in many different industries. We provide certified equipment appraisals for business owners, attorneys, accountants, lenders, brokers and other decision makers who need accurate and timely certified appraisals. Our certified equipment appraisals are used for business valuations, mergers and acquisitions, SBA approval, purchase and price allocation, partnership buyouts, business dissolutions, gifting purposes, tax planning, tax resolution, as well as to establish asset-based lines of credit.

Our fees are dependent upon the size and scope, as well as the purpose and use of your appraisal project. We consult with you to help determine whether a formal certified appraisal is required or whether a desk top assessment will suffice. Our objective is to provide you with the report you need, when you need it, at a reasonable fee.

So, whether you need to know the fair market value or other standards of value such as liquidation value, value in use, salvage value or replacement cost, the professionals at RSI can provide you with an appraisal report in a timely manner at a competitive cost that will meet the requirements of financial institutions, government agencies, buyers & sellers, shareholders or partners.

SBA Mandated Valuations and Appraisals

If a change of ownership loan that is being presented to the Small Business Administration (SBA) for guarantee is for more than $350,000, or if there is a close relationship between buyer and seller, the lender must obtain an independent business valuation from a qualified source. Standard Operating Procedure 50-10(5) defines a "qualified source" as a person who regularly receives compensation for business valuations and who is accredited by a recognized organization.

As one of the largest, accredited business valuation firms in the United States, having performed certified business valuations in 49 of 50 United States, RSI is a highly qualified source for SBA business valuations. Our professionals’ unbiased and independent opinions consistently withstand the scrutiny of the IRS and other outside experts, and our staff is comprised of seasoned professionals with extensive business valuation experience across a wide range of industries.

Feasibility Studies

A business feasibility study is just what it sounds like: a viability analysis to understand whether or not a specific project, venture, or approach is realistic and feasible. The ultimate outcome of a feasibility study is to get to a 'go’ or 'no go’ decision.

The study must be based in reality --- not pure speculation or abstract theory. This usually requires in-depth market research to understand whether or not customers will buy, whether there is an adequate customer base to buy and/or if investors will invest.

Before making the significant investment required to start a new business venture you must know your market. A Feasibility Study by RSI will look at your business venture to determine its viability and feasibility from three angles: external market, internal operation, and investment performance.

Types of Feasibility Studies

At RSI, our expertise is market feasibility. We research and analyze market factors such as demographics, demand, market capacity, competition, regulation, cultural issues, etc. Here are some examples of the types of feasibility studies we do:

  • New products and services
  • New business methods or approaches
  • New ventures
  • New technologies
  • Restaurants
  • Hotels
  • Apartment complexes
  • Schools and other education projects
  • Community development and tourism projects

We have the strategic partnerships in construction, architecture, strategic planning, marketing, technology and other areas to insure your 'go’ or 'no go' decision is well thought out and virtually irrefutable.

Buy Side Representation

Our strength comes from the fact that we are not an investment banking or brokerage firm, which insures no conflict interest exists. It also insures that our agenda is your agenda. We help you develop an acquisitions strategy and approach that makes sense for you. RSI maintains relationships with major banks, investment banks, venture firms, and private equity investors throughout the US and Canada, providing bountiful recourses to provide the 'right fit’ and 'right funding.’

With extensive expertise in buy-side acquisition representation, transaction negotiations, acquisition due diligence and business valuation, we are able to compliment your acquisition efforts and complete levels of screening and research that would be prohibitive for your staffs. Our support allows you to leverage their time and resources to complete acquisitions quickly, dealing only with select, well-qualified acquisition candidates. Our approach to strategic acquisition is outlined below:

  • Acquisition Criteria Development
  • Industry Analysis and Market Research
  • Target Company List Development
  • Target Company Research
  • Target Company Approach
  • Acquisition Lead Presentation and Reports
  • Due Diligence Support
  • Financial Analysis and Modeling
  • Acquisition Valuation
  • Acquisition Financing (Capital Raising)
  • Corporate Governance (Board of Directors & Management Recruiting)
  • Fairness Opinions & Valuation Analysis

Due Diligence

Due Diligence is defined as: the care that a reasonable person exercises to avoid harm to other persons or their property...or more specifically, research and analysis of a company or organization done in preparation for a business transaction, such as a corporate merger, acquisition, succession or even strategic alliance.

Pre-Sale Due Diligence

Often overlooked, yet critical to ensure a smooth transaction, effective due diligence is essential…now, more than ever. Although buyers are targeting acquisitions, they are doing so with a heightened degree of scrutiny. This increased scrutiny is driven by recent economic events. From the buyers’ perspective, even if ample cash is available, they are still likely to leverage the acquisition to increase their percentage returns and ability to expand. Leverage brings lenders to the table. From the lenders’ perspective, even if they are familiar with the deal, they need detailed and accurate information support for their loan. With a tighter credit environment, tougher reporting and more stringent due diligence requirements, you need to do more today to ensure a smooth transaction process.

Being prepared is one of the most important aspects of effectively marketing a company for sale. The information that may be requested by a buyer, investor or lending source must be available and up to date. Many potential acquisitions are lost because the owner was not prepared and could not supply the needed information in a timely manner. Through our experience in working with countless lending institutions, investment banking firms, venture capital groups and publicly traded companies, we have put together a Company Due Diligence Package that meets, and in most cases exceeds all of their reporting requirements.

Transaction Due Diligence

Any organization considering an acquisition needs to (i) assess the validity of all the information provided by the company of interest, as well as (ii) test all the assumptions it is making about that deal. Financial and operational due diligence provides peace of mind to both strategic and financial buyers, by analyzing and validating all the financial, commercial, operational and strategic information provided as well as the assumptions being made based upon that information. The objective is to confirm there are no 'skeletons’ or 'black holes.’

Our due diligence service components include revenue due diligence, legacy liability, synergy validation, maintainable earnings and future cash flows. Areas of consideration and concern are as follows:

  • We can enhance your understanding of the target business and therefore increase the likelihood that the deal will achieve its objectives.
  • Industry Analysis and Market Research
  • We can help you to identify and understand critical success factors and therefore improve your understanding of all the relevant issues so that decisions can be made on an informed basis.
  • We can highlight strengths that can be built upon or weaknesses that need resolving.
  • We can challenge or validate the target's historic financials and forecasts.
  • We can identify the real sources of profit and cash flow, assess their sustainability and underlying free cash, and confirm the value drivers.
  • We can define cost savings and revenue enhancements by focusing on the available synergies and quantifying what is achievable.

Whether it is a midsized privately held company or a single division of a large public company, it is rare that this data is tracked routinely by the lean accounting staff that is focused on daily operations and normal reporting needs.

The point is, this is not something that is easy to compile and typically requires strong financial modeling skills, trained analytical skills, and a background in financial forensics specific to corporate acquisitions. The team at RSI has extensive background in this field. Which ensures the assignment is handled with expertise and the information is presented in an organized and professional manner…ready for presentation to your lending source or governing board.

Exit Planning

The success or failure of the business owner’s exit is directly related to the exit plan he or she has in place. How well the owner’s personal, business, financial, legal, and tax issues are understood and handled are key to a successful exit. Missing one step in the exit plan could be critical to the successful transaction or succession, possibly leaving hundreds of thousands or even millions of dollars at risk, exposed to tax or on the table…or even worse, blowing the deal all together.

Transitioning a business to the next owner is one of the most important events in a business owner’s life and may include selling to:

  • A family member
  • A partner
  • Management
  • Employees
  • An outside party via an acquisition
  • Another company via a merger

Ironically, most business owners spend more time planning a vacation than they spend planning the critically important exit from their businesses.

Our Exit Strategy Consultants are uniquely qualified to provide you with an exit strategy that makes since for you and your family. Our goal is to guide you in a logical, rational and precise manner, all the while taking into consideration that exiting your company can be a very emotional decision.

So, what is your Exit Strategy? There are seven basic options. In no particular order, they are as follows:

  • Sell to a Financial or Strategic Buyer
  • Keep the business in the family through successful succession
  • Sell to a Key Employee…or Key Employees
  • Sell to all the Employees using an ESOP (Employee Stock Ownership Plan)
  • Take the company Public
  • Manage for life (plan to die in the business or become a passive owner)
  • Plan for a Controlled Liquidation

As you begin the process of Exit Planning, it is extremely important to define each one of the options, as well as identify some of the key elements and barriers of each option. The word "barriers" refers to anything that creates an obstacle to a possible transaction, acquisition, or implementation of a succession plan.

Which option works best for you and helps you accomplish your exit goals will become the foundation of your exit strategy. But to ascertain which option is best, you first need to define your hearts desire (personal) and personal objective (financial). Things to consider are your legacy desires, retirement desires, exit timeline and the amount of cash needed to exit gracefully and successfully.

Three Elements of a Successful Exit

To exit successfully, owners need:

  • A Game Plan
  • Exit Planning is a process that helps owners decide where they want to go and how they will get there.
  • Experienced Coaches
  • You must assemble a team of trained and experienced advisors to guide you through choices and decisions as they work toward your exit goal.
  • Execution
  • Success depends upon a disciplined implementation centered upon your exit desires and timeline.

Good exit planning requires a coordinated effort from a number of advisors; including valuation specialists, financial & insurance advisors, tax strategists, a CPA and an attorney (with merger, acquisition or succession backgrounds), as well as business brokerage professionals. RSI works with, and through the various qualified advisors to help you achieve your exit goals.

National Business Broker Network

Confidentially marketing a company for sale requires special skills in the area of negotiations, financial statement analysis, business valuation, deal structuring and contract law. With access to over 1800 Business Brokers, Intermediaries and M&A Professionals we can help lead the company to a successful acquisition and the business owner to a prosperous exit. We confidentially negotiate the terms to successfully market the company for sale with our business broker partners. Because of our relationships and the preparation that has gone into preparing for your exit, we are able to provide effective representation, all the while protecting the best interest of you, our client.

  Client Testimonials

 …I must say I am very impressed with the valuation and exit plan. I am impressed with the professionalism. You have assured that my business will succeed for generations to come…I can not tell you what it means to me and my family.”

-Owner of a Quarry Business in BC, Canada (family succession)

 42 days from LOI to SBA funding…thanks RSI.”

-Buyer of Lumber Company in Texas

 Your valuation helped me negotiate with confidence and the exit plan saved me over $100,000 in taxes and fees. I do not think I could have closed the deal without your help.”

-Owner of Oil Field Company in Wyoming

 The annual valuation RSI has done on my business has been invaluable. It has helped me triple my company's value in the last 8 years. It made negotiating with the buyer [of my company] much easier because I was very confident and when I pulled them out, they were speechless.”

-Majority Shareholder of Gas Turbine Repair, Houston Texas

 RSI valued our company and helped plan our exit. Then they brought in a national business broker who found us 3 interested buyers in 4 months. When we started, we didn't know what 'exit strategy' was.”

-Owners of Industrial Supply, Arkansas

 RSI's ability to provide documentation services to businesses is remarkable. RSI provides value to Businesses by proving the Company's determination of Value to a buyer or Financer. RSI provides 'Exit Strategies' for small to medium sized business owners and 'Business Plans' to aid in the growth of that business. I have used RSI exclusively for the past 5 years and can report many happy clients.”

-National Intermediary, North Carolina