Stock valuations are generally part of most business transfers. Typically stock value is agreed between yourself and the buyer of the business as you progress negotiations of your business sale. If there are any disputes in the process, or you would like to ensure that you are placing an accurate valuation on your stock, you can utilise an independent stock valuation firm.
In most circumstances, both the buyer and seller are mutually motivated to progress the sale, therefore this process is relatively straightforward. Additionally as the business transfer agent we would be on hand to help any stock negotiation and ensure the progress of your sale.
In terms of the actual valuation method, this is normally calculated by analysing the current stock and arriving at a ‘live stock’ value. Basically this means that you will arrive at the cost price of your stock with a consideration of its current saleability. This protects your buyer from paying for stock that is not longer saleable – a simple example of this would be a clothes retailer that still has stock of last season’s fashion.
What happens if the buyer doesn't want the stock?
If your buyer is looking to acquire your business and make significant immediate changes, such as a refit or to change the nature of the business, then stock is not likely to be part of your sale. In these circumstances you will likely run down the stock until the transfer of your business, with any stock remaining sold independently or to an overstocked business firm.
Stock At Valuation
On our website the majority of businesses are listed with the +SAV acronym – representing Stock at Valuation. In essence this means that the value of your business is separated from your stock value.