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Evaluating a Buyer's Intent

If you're an experienced aviation entrepreneur considering the sale of your business, it's essential to recognize that this is a significant decision that requires careful planning. Accurate valuation plays a pivotal role in ensuring you receive the full worth of your aviation enterprise.  

The aviation industry, like any other, presents unique challenges when it comes to business valuation. To guide you through this complex journey, we'll explore the intricacies of aviation business valuation, highlighting potential pitfalls and providing actionable solutions. Here, we've outlined key steps and common errors to avoid, empowering you to navigate this process with confidence and success. 

 

Unrealistic Expectations: 

 

One of the most common valuation blunders in aviation that we see is having unrealistic expectations about your business's worth. It's understandable – years of hard work and dedication can lead to an overly optimistic view of your company's value and  have an emotional attachment to the business  

 However, being too optimistic can deter potential buyers and hinder the sales process. We encourage aviation sellers to be open-minded in their approach and seek independent advice from reliable sources to set realistic expectation, which then encourages prospective buyers to review and put forward an offer. In contrast, if the seller  askes too much for their business, it can be a put-off to buyers and miss the opportunity to sell. 

Ultimately, the business is worth it as someone will pay for it. If you are motivated to sell your company, having a flexible approach is the key to adapting your selling strategy to the market’s feedback.  

 

Seeking Professional Valuation:  


Valuation in aviation is a complex process, requiring expertise in various methods and levels of complexity. Many aviation entrepreneurs make the mistake of attempting to value their business without professional guidance. To avoid this error, collaborate with a chartered business valuator with industry-specific knowledge. Their expertise ensures precise and tailored valuations. 

 

Transparency in Sharing Information:  


Selling your aviation business necessitates sharing detailed information about your company with a valuator. While it's natural to be cautious about revealing confidential data, transparency is essential for realistic valuation. The process often involves on-site visits, interactions with key personnel, and follow-up questions to fully understand your aviation business. It's indeed an involved process. 

 

Expecting a Fixed Value: 


Valuation in the aviation sector is not an exact science. Aviation valuators typically provide a price range, rather than one precise value, which can be influenced by various factors. It's crucial for sellers to understand this and not rely on a single value. Valuation considers the company's stand-alone worth, which may differ from the final transaction price due to factors such as the buyer's strategic interests and the owner's readiness to sell. 

 

Brookfield's Specialisation: 


Brookfield Aviation specialises in providing support to aviation businesses. Prior to engaging with us, we hold an open and honest conversation with aviation business owners regarding current market conditions and valuation. We request historical financial data and projections, including owner compensation, to calculate normalized adjusted EBITDA. 


One of the most significant challenges we've observed in the market is unrealistic seller valuation expectations. It's not uncommon for sellers to believe their business is worth far more than the market will value. According to a recent study, 58% of brokers consider unrealistic seller expectations the primary hurdle in aviation transactions today. 


We emphasise the importance of understanding the intricacies of aviation business valuation and the need for professional guidance. For aviation business sellers, our support ensures accurate valuation, setting the stage for successful transactions. As Warren Buffett wisely said, "Price is what you pay, value is what you get." 


Contact us for tailored guidance on aviation business valuation and let us help you achieve the true value your business deserves. Book a free call consultation call  

Or email vviaviaanna@brookfieldav.com .  

 

We are looking forward to hearing from you.  

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