Experience Generated Methodology for Small Business Valuation Purposes in Vancouver

Relevant Experience Is Key.

Almost everyone agrees that the intangibles are the drivers for businesses large and small. Correlating the Normalized Net Income to the huge intangible asset value that drives the business must be done.

We accomplished this by using relevant, long term business ownership and operation experience to measure the factors, to find their importance to the overall business, and assign an individual weight. This is why relevant experience is necessary to value intangible assets. Furthermore, we believe it would be almost impossible for someone to do this without relevant business owner experience.

In our experience of producing in the range of 20 business valuations for CRA purposes which to the best of our knowledge were all accepted and not challenged by CRA; additionally, in at least 200 other business valuations, we found that there were no circumstances where scores lower than minus 5 or higher than plus 10 existed. For efficiency, we therefore chose to use the scale of -5 to +10 in our determinations. We remind readers again of the court ruling on April 7, 2017, court file number 1601-15411 where the client won using my valuation and methodology.

We believe an advanced methodology like this has not been developed within the International Valuation Standards Council and their business valuation organizational membership of 180 member organizations across 137 countries; because their membership is almost 100% accountants who lack long term entrepreneurial and relevant business owner operator experience needed for valuing small businesses.

IVSC has 6 prominent Canadians on the board and the largest business valuation group in Canada is a leading VPO member. These groups try to use precedent or “stare decisis” status to block advanced methodologies to the detriment of clients, courts, the economy, and the industry.

What we have created is new to the small business valuation industry but not likely new to Venture Capitalists who have some methodology to understand intangible asset value.

Leave a Comment

Your email address will not be published. Required fields are marked *