Westlake Village Business Appraisals

Transferring your business to the next generation of family or employees, or selling your business in Westlake Village, California - can be a real challenge. So can settling estate tax matters when a business owner dies.

According to the Exit Planning Institute’s Owner Readiness Survey, 75% of business owners want to exit within ten years, making it crucial to understand today's business value to ensure that you will be able to exit at your planned exit date with enough wealth to support your lifestyle. Having a solid advisory team becomes indispensable in preparing the business for sale, and winning the M&A exit deal.

SB Valuations’ business appraisals in Westlake Village ensure that you are more informed on the M&A market, enabled to make better strategic decisions, prepared to identify any gaps that need to be addressed and are equipped to maximize your business's exit value. We specialize in certified reports for partner exits, estate taxes, gifts and employee compensation; and simple calculations for M&A, mediated divorce, and where budget is limited.

Speak with SB Valuations today to learn more about how we can help you.

Jim Lisi, CVA, MBA

Why Choose SB Valuations for Your Westlake Village Business Valuation?

Founder James Lisi started in the business valuation profession at American ValueMetrics in 2003. Under the mentorship of seasoned investment banker Gerald Barney, James honed his skills by working on various business appraisal reports part-time while owning and running another business. After exiting the other business interests in 2012, Lisi decided to take on a valuation career and began the process of becoming certified to NACVA's CVA credential. Once completed, SB Valuations was formed in 2013 and worked as a subcontractor to other valuation companies before striking out independently in 2020.

Over the years, James has contributed as an author to well-known publications like Journal of Forensic and Investigative Accounting, The Value Examiner, ISBA Journal, Business Valuation Update, and Pacific Coast Business Times. His main point of writing is for the application of scientific method to valuation over statistics and proxy methods. Scientific method determines value by cause-and-effect relationships, directly connecting data to the conclusion in a logical chain of reasoning.

Estate and Gift Planning for Westlake Village Residents

Fair market valuation is key to avoiding excessive taxes and ensuring compliance when transferring business interests or real estate assets. Our estate and gift appraisal services help Westlake Village families manage these transitions effectively and minimize tax liabilities with well-support discounts to company market value.

Business interests in real estate holding companies are a particular specialty where SBV repeated appraises values of partial interests at less than half the value of the underlying real estate. Several specific factors drive the 'discounts', which include exit costs, portfolio issues and lack of marketability.

409a Valuations for Westlake Village Companies

SB Valuations also performs rigorous 409a valuations to ensure compliance with IRS regulations, crucial for companies in Westlake Village to offer equity options to their employees.

Our 409a niche is in the early stages before a company has received external capital in a competitive round of bidding. This is where ‘current value’ appraisals provide the proper value, not GAAP-style 409a reports. In addition, these founder stage companies may want to offer equity without diluting the founders unnecessarily. SBV considers how the variables are used in the valuation, which is best set with the company's very first 409a equity valuation.

Complex Valuation Needs for Businesses in Westlake Village

With a deep understanding of present value economics and broad experience, we also appraise private company financial instruments like a company's secured promissory notes. In real estate, we also value tenant-in-common interests along with LLC and partnership interests.

Lisi's expertise is crucial when Westlake Village businesses face unique issues. Understanding the mechanics of owner rights, where Lisi is published, is important in valuing complex securities and navigating disputes and business damages.

Litigation Valuations in Westlake Village

SB Valuations also has expert witness experience. Our logical, transparent appraisals explain value to a court with a thorough explanation of alternatives used in coming to the conclusion. Using logic tied to specific data also ensures that arguments for your business’s worth are included in the court's decision. Some valuations can be thrown out of court if found unrelated to relevant data.

Lisi also has an 'appraisal review' credential, the BCA-R from ISBA. This positions SBV to review opposing reports and provide attorneys with arguments to defeat the other side, or have their reports removed from evidence.

Have a business or assets you’d like valued? Speak with SB Valuations today.

Additional Valuation Insights:

Understanding the Value of Mergers and Acquisitions (M&A)

When it comes to growing your business through mergers or acquisitions, understanding the true value of potential opportunities is crucial. SB Valuations offers expert analysis based on variables that matter, to ensure that you are informed on strengths and weaknesses of the target so that you may assess how the acquisition fits with your strategic goals.

Partner Exit and Investor Valuations

Navigating the complexities of a partner exit requires a clear understanding of the business’s value to ensure a fair exit arrangement for all parties involved. James Lisi’s published work on the differentiators of investment value is particularly relevant here.

SB Valuations' appraisals analyze the relevant investor factors and the effect of the exit on the company to help find an equitable buy-out or buy-in price.

Estate Tax Valuations, Gift Valuations, and Planning

Proper valuation is key in estate planning to ensure that taxes are minimized and the transfer of assets to heirs is done fairly. SB Valuations specializes in providing fair market value valuations for taxation. When it comes to settlement, investment value reports may be better for estate distribution. Talk to your SBV analyst on this issue.

Valuation for Divorce Proceedings

Divorce is a special form of partner exit that can be complicated. SB Valuations delivers objective assessments to ensure impartial division of the marital estate, providing valuations that ensure a fair outcome for both parties and point out tax issues. Consulting services include mediation support and advising on exit options that preserve business value.

Client Testimonials and Success Stories

"Valuations based on asset cash flows and actual market transactions are better than valuations based on equity cash flows and proxies for risk," says James Lisi. "This asset-oriented approach ensures that valuations are realistic and tie to relevant data. Without a tie to relevant data, a valuation may be worthless, and has a distinct chance of being excluded by a court."

One notable success story highlights the importance of expert valuations in estate tax challenges. "The IRS was challenging a $14 million tax discount for an estate with multiple real estate holding companies. We defended the case with scientific method and provided evidence that a possibility exists for a 100% discount. The IRS eventually dropped it," explains Lisi.

Another example of SB Valuations’ impact involved correcting valuation errors for a small company with an ESOP. "A small company had a puzzling valuation result that showed the company was worth less than its cash and inventory on hand. The former appraiser only ran an income approach representing total assets - and the outcome had been unfairly diluting the founders for many years.

By solving the operating and non-operating problems separately and then integrating the results, we corrected the valuation. It is something we do for every valuation. This approach ensures that cash and inventory are counted in addition to the future earnings capability of the business. Now, the founders were no longer being unfairly diluted by their ESOP contributions," explains Lisi.

Contact SB Valuations

For those in Westlake Village and throughout California looking to understand the value of their business or its securities, SB Valuations is ready to assist.

Whether you are preparing for a sale, handling a transition, or navigating legal challenges, our team is equipped with the expertise and experience to provide clear, actionable insights.

Speak SB Valuations today to learn more about how we can help you achieve your goals.

Westlake Village Valuations Frequently Asked Questions

How can SB Valuations assist with startup company valuations?

For startup companies in Westlake Village, Lisi's experience in angel investment valuation is a key benefit to clients looking to attract investors and supporting equity grants to employees.

Founders offering stock to employees need to consider whether a ‘standard’ 409a is right for their company. Founders have a strategic choice not to dilute their holdings with discounts and still meet IRS requirements. 'Standard' 409a reports are inflexible and will not adapt to this issue. As you may expect, the 409a report factories do not mention this option.  This issue should be discussed with the appraiser as part of designing the project.

How can SB Valuations assist with ESOPs?

For ESOP companies in Westlake Village, SB Valuations offers annual valuations for small ESOP companies. These reports balance the ESOP liability and company cash flows so that the effects of the ESOP on business value are neither omitted nor double-counted.

What does the process of a business valuation for sale involve?

The business valuation for a sale can be a simple set of calculations or an in-depth analysis of the company that examines market opportunity, growth rates, and margins. The in-depth option may also include advanced modeling to provide an analysis of future expectations that can aid in maximizing value.

Can SB Valuations provide valuations for specialized sectors like medical practices or tech startups?

Yes, SB Valuations has experience in various sectors. While technology, manufacturing and distribution are core verticals served, professional practice valuations are limited to one or two-person companies. The reason for limiting professional practice engagements is that personal goodwill is a complicating factor. Most multi-person professional practices won't let the appraiser assess the personal goodwill of each partner because the valuation cost becomes excessive. So, beyond a doctor or two, or a lawyer or two, valuing the firm is a guess. That's not the kind of valuations SB Valuations performs.

What role do business valuation firms play in merger and acquisition transactions?

"Our M&A role is either to support an investment banker that outsources initial valuations prior to listing the business for sale or to support a DIY owner who is at a disadvantage negotiating with an experienced potential buyer," says James Lisi.

Being data dependent and relying on transparent matching of the subject company to relevant benchmarks, our reports provide an unbiased understanding of business value. This facilitate smoother negotiations and post-sale integration for ethical, fair deals.

Talk with our lead appraiser Jim at SB Valuations today to learn more about how we can help you.