University of Twente Student Theses


Determining valuation loss in small classical knowledge intensive firms due to owner-dependence

Gurbanov, A. (2013) Determining valuation loss in small classical knowledge intensive firms due to owner-dependence.

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Abstract:Many businesses founded are aimed to be sold at certain time in the future. It is a natural desire of any single business owner to be able to sell his business at the highest possible value. There are lots of resources, consulting firms, etc. dedicated to helping business owners to properly value and sell their businesses. Numerous factors affect market value of a business. In the professional services industry one of the major problems affecting perceived value of a classical knowledge intensive firm is the degree of dependence of the firm on its owner. In this master thesis, I will review academic literature on small knowledge intensive businesses in order to have comprehensive study of owner-dependence concept with all relevant elements and aspects and eventually visualize it in a logically structured framework which later will be exploited in a qualitative valuation of a firm. Thereby, insight will be gained into negative valuation gap between value of the firm today with the owner and value without the owner and potential value gain in the future in terms of progress towards owner-independence. To preserve and increase the perceived value of the firm to potential buyers, owner of the firm should approach the problem from both sides by improving negative and positive aspects and adopting non-existent aspects of owner-dependence.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Industrial Engineering and Management MSc (60029)
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