Letter from the Editor

The dean of business valuation in the United States is arguably Shannon Pratt, the author or co-author of 10 books on the subject and the founder of Business Valuation Resources in Portland, Oreg. Pratt's eight-year-old company has assembled one of the most thorough databanks of private business transactions in existence today, making it the perfect partner for Inc. when it came to preparing the groundbreaking information graphics that accompany this month's cover story (" What's Your Company Worth Now?" page 70). Taken together, the five pages of tables and graphs provide an extensive array of tools that business owners can use to get a solid feel for the current market value of their companies. With nine industry groups and 92 business types listed, almost all companies should find this a useful guide.

This information was previously available only to paid subscribers of BVR's Pratt's Stats, a database that contains detailed financial statistics pertaining to the sale of more than 5,000 private companies, most since 1995. BVR gathers the numbers in two ways: first, by getting information from business intermediaries involved in private company sales and second, by using SEC filings from public companies that bought private companies. Even a subscriber to Pratt's Stats, however, only sees the raw data in bits and pieces for particular transactions. BVR and Inc. devoted many hours to molding the numbers so that readers can track broad trends and see how different valuation formulas compare for different types of businesses. Although average sales prices have declined in recent years with the slowing economy and investor reassessment of asset values, Pratt says he sees signs that the market has bottomed out. "Buyers and sellers are finally coming to grips with current valuations, and deals have picked up," he says. Inc. executive editor Ed Sussman supervised the project. Special thanks also to Doug Twitchell, director of financial research at BVR, who ran the many hundreds of database searches that help make this the kind of exceptional ser-vice package you can expect from Inc.


Randall Lane's first article for Inc. -- "What's Your Company Worth Now?" -- builds upon his experience reporting for the Forbes 400, a ranking of America's richest people. Lane's 2001 article for Worth about Charles Schwab as media mogul was anthologized in The Best Business Stories of the Year, and his recent story "Cork Screwed" for Time Out New York was a National Magazine Award finalist in the category of leisure interests.

Alison Stein Wellner is an author and award-winning journalist who writes about business, health, and trends for many magazines, among them American Demographics and Psychology Today. Wellner is a 2002 National Press Foundation Fellow and a 2001 New York Times Professional Fellow. She has written five books about demographics and marketing, most recently Best of Health: The Demographics of Health Care Consumers ( New Strategist Publications, 2000 ).

Hillary Johnson is the editor of the Ventura County Reporter, an alternative weekly in southern California. Johnson has written about American business and culture for 15 years and was a longtime contributing editor of Worth. She has published a book of essays, Super Vixens' Dymaxion Lounge ( St. Martin's Press, 1997 ), and a novel, Physical Culture ( Poseidon Press, 1989 ). Johnson has lived on five continents, and now makes her home on a sailboat in Ventura Harbor.