What steps are involved in the process of appraising a business or practice?

1. Preliminary, no-charge consultation about the services to be performed.
2. Execute an engagement letter (Professional Services Agreement).
3. Complete the Business Information Worksheet and Officers Quest.
4. Gather relevant information about Client operations, personnel, facilities, etc.
5. Gather year-end financials and/or tax returns for last three to five years.
6. Gather current year-to-date financials.
7. Review financial statements to determine adjustments needed to show actual operational cash flow.
8. Physically inspect business or practice operations and assets.
9. Review Business Information Worksheet and other information to obtain clear understanding of the business or practice, its operations, competition, marketing, market share and local market conditions.
10. Normalize financials to reflect operational cash flow and the in-place, on-going value of physical assets.
11. (Optional) Furniture, fixtures and equipment appraisal. MAI appraisal of real estate.
12. Obtain market data for sales of similar businesses.
13. Obtain rules of thumb for sales of businesses in this industry.
14. Obtain data for local, regional and national economic outlook and pertinent demographic information.
15. Obtain financial ratios of similar businesses for comparison.
16. Prepare draft appraisal of business or practice.
17. Review draft appraisal with client to ensure assumptions and statements made in the appraisal are accurate.
18. Finalize, print and bind appraisal.
19. Deliver appraisal report to client and review conclusions.