The Fair Commission Model for Valuing Goodwill in Small Service Businesses
BVR's Webinar Series
The recording and transcript for this webinar are available to subscribers:
Already a subscriber? Login
- What are small service businesses?
- What is Goodwill? Competitive advantage and transferrable customer bases.
- Traditional appraisal approaches to valuing goodwill and their shortcomings:
- Rules of Thumb
- Market Methods
- Asset Methods
- Income Methods
- Conceptualizing goodwill value as a fair commission rate
- Why fairness is important to buyers and sellers of goodwill
- Seller’s criteria for fairness
- Buyer’s criteria for fairness
- How traditional “earn-outs” embed fairness criteria
- Value depends upon buyer: value should be based on synergistic buyers
- Value should be based on discretionary earnings to prospective buyer
- Goodwill value always has an upper bound. Three ways to compute upper bounds:
- Maximum Competitive Advantage
- Compete or Buy
- Differential Compensation
- Example 1: Dental Practice
- Example 2: Landscaper
- Abandoning False Certainty: The Shift to Probabilistic Forecasting
- Key Forecasting Variables:
- Transfer rate
- Attrition rate
- Discretionary Earnings per Customer per Year
- Calibrated estimates and computer simulation
- Components of computer simulation
- Comprehensive Case Study: Barber Shop
- Identify small service businesses that possess marketable goodwill
- Examine the shortcomings of traditional appraisal approaches to valuing goodwill
- Describe the alternative Fair Commission model to appraise goodwill
BVR's Training Packs are an indispensable addition to any valuation reference library. Use them as training tools as many times as you'd like, wherever you are: play them at your computer at work or home, in your car, or on your personal audio device.
Delivered as an electronic download approximately four weeks after the program has aired, each Training Pack includes:
- Recordings and transcripts of the presentation
- All presentation visual aids and handouts
- All ancillary reading materials suggested by our presenters
If you are ordering a Training Pack after the four week window, the download link will be sent to you immediately via email. Please check your spam folder and add email@example.com to your “safe list” to ensure you receive your Training Pack.
See BVR's complete list of available Training Packs from past webinars for more information.
BVR's Satisfaction Guarantee
Business Valuation Resources offers a 100% money-back guarantee on our training services. If you are not completely satisfied with your experience, or have any feedback, please contact Business Valuation Resources at 1-503-479-8200 or firstname.lastname@example.org.