Goodwill in Small Service Businesses: Negotiating a Fair Price by Michael Sack ElmalehGoodwill in Small Service Businesses: Negotiating a Fair Price by Michael Sack Elmaleh

Goodwill in Small Service Businesses: Negotiating a Fair Price

byMichael Sack Elmaleh

Paperback | January 15, 2017

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Businesses such as accountants, veterinarians, barbers, hair stylists and dentists possess goodwill: they have repeat customers they can transfer to a new owner. This book provides a guide to buyers and sellers in setting a value for such firms that is both fair and rational. 

Goodwill in Small Service Businesses clearly explains the many problems with existing appraisal methods, and develops an alternative appraisal approach rooted in the basic universal concepts of fairness uncovered by behavioral economists such as Kahneman and Tversky. The author’s new appraisal approach also stresses the importance of accurate forecasting of future economic returns to potential buyers and the need to utilize computer simulations to capture the risks associated with the acquisition of an established service firm.

This book will prove very useful to buyers and sellers of smaller closely held service firms as well as business appraisers, attorneys, judges, lenders and accountants. Numerous real world examples are included along with a case study illustrating the application of the author’s new appraisal approach. 

Title:Goodwill in Small Service Businesses: Negotiating a Fair PriceFormat:PaperbackDimensions:254 pages, 10 × 7 × 0.53 inPublished:January 15, IncLanguage:English

The following ISBNs are associated with this title:

ISBN - 10:1634919246

ISBN - 13:9781634919241


Table of Contents

Chapter One: IntroductionChapter Two: The Challenge of Appraising the Value of Small Closely Held Service FirmsChapter Three: The Small Service Sector Economic EnvironmentChapter Four: Tried and Not So True Appraisal Methods: Rules of ThumbChapter Five: Tried and Not So True Appraisal Methods Part II: The More Rigorous ApproachesChapter Six: The Negotiation: Converging to FairnessChapter Seven: The Potential Acquirer's Capacity and Motivation to Bid for an SC's Enterprise GoodwillChapter Eight: The Optimal Potential Acquirer's Fair and Rational BidChapter Nine: Measurement Methods and ChallengesChapter Ten: Risk, Probability Functions and SimulationsChapter Eleven: Moving Business Appraisal from an Art to an Empirical ScienceChapter Twelve: Male Barber Case StudyChapter Thirteen: Other TopicsAppendix One: How the Standard Discounted Cash Flow Methodology Treats Investments in Closely Held Firms as a PerpetuityAppendix Two: Summary of Appraisal MethodologyGlossaryReferencesIndexAcknowledgementsAbout the Author

Editorial Reviews

"The book is very well organized and tells a very clear and easy to follow story; clearly written; the examples are excellent and really help to reinforce the concepts conveyed in the book. Elmaleh does an excellent job of highlighting several shortcomings associated with current valuation techniques and does a good job of offering a very viable alternative that in my opinion overcomes many of the limitations of currently used approaches to valuation."- James J. Hoffman, Co-Editor of Journal of Business Valuation and Economic Loss Analysis, Dean, College of Business, New Mexico State University"In this exceptional book, Michael unravels the mysteries of valuing a small services business and explains how to use science rather than art to find out how much it is worth."- James Gross, Attorney, Author and Managing Partner of Thyden Gross and Callahan