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Frequently Asked Questions

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What is Climb?

Climb provides a valuation tool for business owners. These valuations were tested against accredited valuations and with real business owners. Before spending thousands of dollars on an accredited valuation, business owners can use a Climb to set a baseline. Additionally, Climb provides tools for business owners to understand how different growth initiatives could impact their valuation.

Why should an SMB get a Climb valuation?

There are few tools that allow business owners to track the value of their largest asset, their business. Climb provides business owners with a non-accredited valuation, without having to spend thousands of dollars.

Why does a business owner need to know the value of their business?

  • Planning for retirement
  • Planning to grow the business
  • Succession planning
  • Bringing on a partner
  • Selling the business
  • Divorce
  • Using the business to finance debt

What information do I need to get a valuation?

Business owners have two options for receiving a Climb valuation.
  • Connect their Quickbooks or Xero online accounting software. They must have the online version, and they must have 3-5 years of historical information (P&L and Balance Sheet)
  • Manually enter their financial information. If business owners do not use online accounting software, or they do not feel comfortable linking their online accounting software they will need 3-5 years of the following information:
      • Revenue
      • Cost of Goods Sold
      • Expense
      • Owner’s Compensation
      • Depreciation
      • Amortization
      • Cash and Cash Equivalents
      • Long-term Debt

How does Climb calculate the value of my business?

Climb uses a discounted cash flow model to project the value of a small business. Climb uses historical financial information to calculate an average growth rate. That growth rate is then applied to future free cash flows. To account for risk, we then take the net present value of three years future free cash flows. The net present value of future free cash flows, plus cash and cash equivalents, minus long-term debt provides the Climb value.

Does Free Cash Flow equal EBIT?

Free Cash Flow is EBIT minus taxes, then we add back variables such as depreciation, amortization, and owner’s compensation. It is very important that the business owners provide a “total” compensation. This should include all expenses that they expense to the business. Vehicles they drive, meals, cell phone, and other expenses would want to be included in Owners Compensation.

How do I use Scenario Modeling?

Scenario Modeling allows a business owner to test their valuation under different scenarios. Projected fields for: Revenue, Cost of Goods Sold, Expense, Owner’s Compensation, Cash and Cash Equivalents, and Long-term debt are all editable fields. Small business owners can adjust these fields and hit “Run Scenario” to see how different outcomes would impact their valuation. For instance, if a business owner is thinking about expanding the business through debt, the owner could increase the long-term debt field, and make the appropriate adjustments for Revenue, and/or Expense.

What if I don't agree with my valuation?

Climb has been tested with dozens of small business owners and has proven to be highly accurate. If the small business owner disagrees with their valuation, they should first review their historical information in the graph. Does the information match what they typed in during manual entry? Is the data pulled from Quickbooks inaccurate? If they notice discrepancies, they should email help@tryclimb.com. Whether there is a discrepancy, or they believe the valuation is wrong, they can use scenario modeling to adjust. By adjusting the variables in Scenario Modeling the small business owner can see how their valuation changes under different scenarios.

Disclosures

Banking services powered by M&T Bank, Member FDIC.

Climb valuations are for informational purposes only.  You should receive an accredited valuation before any lending, financing, or business transition planning. Climb is powered by M&T.

Use of these features and services requires Internet and/or data access through a computer or mobile device. Subject to availability and the same limitations as any service available through the Internet. M&T Bank is not responsible for matters that are outside of its reasonable control that might impact availability and functionality. M&T Bank reserves the right to suspend service for any reason at any time. Your mobile carrier's text messaging and data charges may apply. View the M&T Bank Digital Services Agreement for additional details.