Wednesday, September 23, 2009

Owner Mistakenly Forgets Wife's Salary (Part 1)

Just finished another valuation for a company. The company is doing about $550,000 and after my initial review of financials, equipment lists, and answers to various questions my initial value was approximately $355,000.

All things considered, that turned out to be a pretty decent or healthy valuation! Apparently the buyer was prepared to pay that amount and the seller's own numbers came pretty close.

Well, everything was ready to literally save and send when I received a casual note from the owner. Almost hidden among his commentary was a brief mention of Paula, his wife, and how valuable she was to the business, etc., etc.

Guess what? This was the first time her name or her involvement in the business had been mentioned! Now this is what it did to the original valuation...

See Next Blog for Part 2 of this Story

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