There are significant benefits to determining the value of your business, even if you are not currently contemplating a sale. The benefits of a collection agency valuation include:

1. Planning for strategic growth;
2. Developing a succession plan;
3. Establishing financial controls;
4. Creating a baseline for a long-term sales plan; and
5. Obtaining bank financing or alternative forms of capital.

Finding accurate comparable data is difficult because most business transactions are done on a private and confidential basis. The data is not made available publicly. You could call your CPA, but they lack industry knowledge so their approach is typically generic and not reliable. That is where the Kaulkin Ginsberg Strategic Valuation Assessment (SVA) comes in to play.

Our SVA is aimed at providing owners of debt collection agencies and accounts receivable management firms with an accurate understanding of value relative to current market conditions. By putting your business through an SVA process and doing so well in advance of a potential sale or succession, you will be better positioned to maximize your company’s value and realize your desired outcome when it comes time to transact.

The collection agency valuation experts at Kaulkin Ginsberg will evaluate your company’s financial and operational performance relative to economic and industry market conditions. We will:

1. Review financial and operational performance from the perspective of a buyer;
2. Analyze your business’ value in today’s market relative to proprietary transaction and market data;
3. Examine critical documents in advance of a sale and assess any potential issues;
4. Explore factors that add to or detract from the business’ value and offer ways to enhance value;
5. Monitor the company’s performance throughout the years leading up to a transaction; and
6. Update ownership on market conditions and changes that may impact value.

Things you can do on your own and at no cost

There are certain documents that all owners should have in place before engaging in discussions with prospective buyers. These include a complete set of historical financial statements for the past 5 years, a current year-budget to actual statement, a projection for the next 2-3 years with assumptions, an updated client and prospect list, client and vendor contracts, a complete and current organizational chart, articles of incorporation, partnership agreements, insurance policies, lease documents, and employment contracts (if they exist).

Our experts are available to help you prepare the following critical documents:

1. Client contribution reports;
2. Sales pipeline analyses;
3. Multi-year forecasts with a rock-solid basis of assumptions; and
4. Normalized (or adjusted) income statement to reflect the true profitability of your business.

The SVA will enable you to make a well-informed decision (whether it be to sell now or at some point in the future), position your company for succession, or focus on improving its performance and overall profitability. Our experts will evaluate your company’s strengths, identify weaknesses and threats, and provide recommendations on opportunities to grow value.

By mitigating risks related to factors outside of the company’s control and improving on those within its control, your business will be positioned for success – no matter the route you choose. Regardless of your desired outcome, our team of collection agency valuation professionals is prepared to work with you to ensure that the business is well positioned to maximize value. Please contact us at HQ@kaulkin.com for a free and confidential consultation.