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Field Guide to Business Value

(Updated May 2014)

Valuing the intangible? Understand the distinctions between business value, going-concern, and goodwill—and find out how these concepts apply to hotels & motels, retail establishments, and special purpose properties—in this updated field guide.


Terminology

BUSINESS ENTERPRISE VALUE (BEV)
"A term applied to the concept of value contribution of the total intangible assets of a continuing business enterprise such as marketing and management skill, an assembled work force, working capital, trade names, franchises, patents, trademarks, contracts, leases, and operating agreements." (The Dictionary of Real Estate Appraisal, 4th ed., Appraisal Institute)

GOING-CONCERN VALUE
"An operating business enterprise that is expected to continue." (The Dictionary of Real Estate Appraisal, 4th ed., Appraisal Institute)

GOODWILL
"An intangible, salable asset arising from the reputation of a business; the expectation of continued public patronage; including other intangible assets like trade name and going concern value...," (The Language of Real Estate, 5th ed., John W. Reilly)


Valuing the Intangible

Business Valuation 101 for Bankers (The RMA Journal, Apr. 2014). Q

Acquisition Is All About Getting the Price Right (San Diego Business Journal, Mar. 10, 2014). Q

Cash Confirms the Valuation Economics (SDM, Mar. 2014). Q

Business Valuation Knowledge is Vital to Winning Battle of Experts, (Valuation Strategies, Mar./Apr. 2013). Q

Do You Know How to Capture the Value of Know-How? (Valuation Strategies, Mar./Apr. 2013). Q

The Importance of Performing a Business Enterprise Valuation, (Valuation Strategies, Sept./Oct. 2012). Q

Using Dynamic Forecasting to Value Early-Stage Ventures, (Valuation Strategies, Mar./Apr. 2013). Q


Hotels & Motels

Hotel valuations pointing upward (Hotel Management, Aug. 2013). Q

Inside the valuation of the Yellowstone Club, (Real Estate Finance, Oct. 2009). Q

Valuing limited-service hotels: a pragmatic framework from a broker's perspective, (The Appraisal Journal, Winter 2008).  Q


Retail Establishments

Innovation in Retail Business Models, (Journal of Retailing, July 2011). Q

A Prescription for Assessing Drugstores, (Journal of Property Tax Assessment & Administration, 2010). Q

Building retail tenant trust: neighbourhood versus regional shopping centres, (International Journal of Retail & Distribution Management, 2010). Q

"Review Articles: What We Know About Shopping Centers", (Journal of Real Estate Literature, 2009). Q

Local economic analysis for shopping center appraisals, (The Appraisal Journal, Spring 2009). Q


Agencies, Small Firms, and Franchises

Selling the Franchise System: Laying the Legal Groundwork to Optimize Value, (Franchising World, Apr. 2013). Q

Using Guideline Company Multiples for Small Firm Valuations, (Valuation Strategies, Mar./Apr. 2013). Q

Focus Business Appraisals to Meet Client Needs, (Valuation Strategies, May/June 2012). Q

What's Your Agency Worth? (Best’s Review, Apr. 2012). Q

Factors to Consider in Agency Valuations, (Best’s Review, Apr. 2012). Q

Valuing an Entrepreneurial Enterprise, (Small Business Economics, Feb. 2012). Q


Special Purpose Properties

Valuing Social Enterprises: Any Discount for Good Deeds? (Valuation Strategies, Mar./Apr. 2013). Q

Structuring Construction Company Valuation Assignment, (Construction Accounting & Taxation, Mar./Apr. 2013). Q

Current Industry Trends Affect Hospital Valuations, (Valuation Strategies, Mar./Apr. 2013). Q

Valuing Intangible Assets in Exempt Healthcare Organizations, (Valuation Strategies, Jan./Feb. 2013). Q

Become Fluent in Factors for Valuing Multinational Companies, (Valuation Strategies, Sept./Oct. 2012). Q

Building a Succession Plan, (Construction Accounting & Taxation, Sept./Oct. 2012). Q

Value Metrics and Capital Formation for Accountable Care Organizations, (Valuation Strategies, July/Aug. 2012). Q

Construction Company Procedures to Realize the Value of Intellectual Property, (Construction Accounting & Taxation, July/Aug. 2012). Q

Valuing Physician Medical Practices, (Valuation Strategies, May/June 2011). Q


eBooks & Other Resources

eBooks.realtor.org

The following eBooks and digital audiobooks are available to NAR members:

Business valuation and taxes: procedure, law and perspective (Adobe eReader)

Business valuation for dummies (Adobe eReader)

The market approach to valuing businesses (Adobe eReader)

Real estate market valuation and analysis (Adobe eReader)

The Small Business Valuation Book: Easy-to-use Techniques That Will Help You... Determine a Fair Price, Negotiate Terms, Minimize Taxes (Adobe eReader)

Books, Videos, Research Reports & More

The resources below are available for loan through Information Central. Up to three books, tapes, CDs and/or DVDs can be borrowed for 30 days from the Library for a nominal fee of $10. Call Information Central at 800-874-6500 for assistance.

The valuation of office properties: A contemporary perspective, (Appraisal Institute, 2009). HD1393.58.U6 S55

Subdivision valuation, (Appraisal Institute, 2008). HD1389.5.U6 E44

Valuation by comparison: residential analysis and logic, (Appraisal Institute, 2007). HD 1387 Ap6vc

Fundamentals of industrial valuation, (International Association of Assessing Officers, 2007). HD 1387 In8f

Business valuation bluebook: how successful entrepreneurs price, buy, sell and trade businesses, (Facts on Demand Press, 2005). HD 1387 Si4

Real estate market valuation and analysis, (John Wiley & Sons, Inc., 2005). HG 4523 K12

Business valuation discounts and premiums, (John Wiley & Sons, Inc., 2001). HD 1387 P88bv

Field Guides & More

These field guides and other resources in the Virtual Library may also be of interest:

Field Guide to Hotel/Motel Properties

Field Guide to Retail Property

InfoCentral Blog


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The inclusion of links on this field guide does not imply endorsement by the National Association of REALTORS®. NAR makes no representations about whether the content of any external sites which may be linked in this field guide complies with state or federal laws or regulations or with applicable NAR policies. These links are provided for your convenience only and you rely on them at your own risk.