Ever wondered what the value is of a small business? A new digital-driven but still human-controlled offering from ValuStrat makes answering that question a lot easier, cheaper and more accurate.
The world of business valuations is one full of complexities. There are different ways to look at companies, a nearly unlimited number of factors and key performance indicators that can be assessed, not even to speak about the range of technicalities that can be applied to ultimately peg a valuation on any business.
For companies seeking to conduct such a time-consuming assessment, the new offering by ValuStrat comes in response to a gap the firm has identified in the SME segment of the marketplace.
For large companies seeking a valuation – typically lenders, investors or those engaged in acquisitions, divestures or capital raisings – paying for the assessment is feasible. But in situations where companies at stake have revenues of up to say $5 million, the traditional manhour-heavy valuations approach often does not stack up: the cost is too high in relation to the value of the potential transaction.
As a result, most SMEs by-pass a formal valuation assessment, or revert to simpler forms of doing so, including using basic rules of thumb, highly automated reports which often take shortcuts, or plainly following their gut feeling.
“Over the past 5 years, we’ve conducted over 150 business valuations for companies from 15+ sectors. And we’ve clearly recognised the increasing demand for affordable business valuations,” said Khurram Merchant, Managing Director of Advisory at ValuStrat.
“This insight sparked an ambitious project within our team,” added Saadain Lari, Director of Marketing at ValuStrat. “We set out to develop an affordable proposition for the SME segment, but at the same one that upholds the high standards of excellence we have in the business.”
Enter: Online Business Valuations platform
The result, billed as the ‘ValuStrat Online Business Valuations’ platform, has now opened for business.
“The proposition is designed to cater to the specific needs of private offices, venture capital, private equity firms and investors looking to assess companies with revenue of $5 million or less,” said Merchant. “We aim to provide value to various of their applications, including audit, internal reporting, investment review, portfolio analysis, fundraising, acquisitions, and dispute resolutions.”
Key elements that come out of ValuStrat’s valuation offering are market and business insight, financial analysis, growth forecasts, and market comparisons. The price? $8,000 for a valuation.
Unlike low-cost automated approaches for valuations, Merchant said that ValuStrat’s approach brings together the best of automation with human expertise that ensures valuations are spot on. “Each assignment has a dedicated engagement manager to ensure a personalised and bespoke delivery, setting it apart from conventional low-cost models.”
“We’ve streamlined a time-consuming engagement initiation process into a seamless, one-click experience, enabling businesses to make smarter decisions with absolute clarity. After a year of development, we are excited to now go live for entities globally.”
Headquartered in Dubai, ValuStrat has a network of 13 offices in 5 countries. The firm will launch the new offering to its client base across the globe.
Want to know more about how this could benefit your investment strategy? Explore our new online business valuations platform.