The ReCourses Valuation Model (RVM) is a sophisticated financial tool to give interested parties a quantifiable, repeatable indication of the value they are creating based on the sum total of their management decisions.

The RVM is a proprietary method for establishing the value of a marketing firm. While valuation services are often coupled with ownership sharing plans, they are also useful for estate planning to ensure liquidity and the proper titling of assets, divorce settlements, creating an ESOP that will hold some or all of your company's shares, determining proportionate value in a buy/sell agreement, funding a buy/sell agreement with life insurance, or dissolving a firm. And some business owners want a valuation of their business just out of curiosity, to measure their progress from year to year in a tangible way and to see how an outsider would evaluate the firm (giving them time to make changes). Regardless of the reason, it can be a useful exercise in measuring what you are building beyond just salary and distributions.

The RVM uses a fixed multiplier (times compensation adjusted net profit), after recasting financial statements to conform to traditional EBITDA calculations. The result is averaged with a fixed percentage of your AGI. Both those results are adjusted mathematically based on a combination of 15 factors in 5 categories, applying the elements that are deemed to not be reflected in the financial statements:

Category: Personnel
Presence of Non-Competes
Level of Employee Turnover

Category: Financial
Age of Accounts Receivable
Debt to Equity Ratio
Months of Cushion in Cash Equity

Category: Institutionalization
Number of Partners
Principal Days Taken Off
Principal Hours Worked Per Week

Category: Management
Age of Firm in Years
Billable Efficiency

Category: Subjective
Product Quality
Location/Market
Marketing Plan
General Condition of the Industry
Proportionate Size of Clients

We then run a standard of deviation study to determine how previous years should be weighted. The resulting number in the RVM is a valuation that is defensible and reproducible over the years. In fact, you will receive the spreadsheet with the formulas and numbers intact, accompanied by a full written explanation.

The RVM is the only valuation method developed specifically for marketing firms, and the methodology is used widely around the world. It's also one of the most accessible (i.e., understandable) valuation methods in use today.

Location. Remote.

Duration. One to three weeks from receipt of requested materials.

Deliverable. Spreadsheet, recast financial data, formulas, and written explanation.

Unlimited Remote Implementation. 1 month.

Participation Requirements. Principal/Finance gather materials for 1 hour. Finance gathers materials for 2 hours.

Cost. $3,000 fee ($2,000 if purchased and paid for with another related service).

Terms. Fee with materials.

References. No.