IBISWorld for Business Valuation

How IBISWorld reports can help in the business valuation process.

Updated over a week ago

Note: this article and video predate our Modern Research Experience. We're working on bringing you the most up-to-date training that aligns with our enhanced platform and products.

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Which industry report sections are most useful for business valuation professionals?

Let’s get started using the Dentists in the US industry report as an example.

Industry at a Glance

The Industry at a Glance chapter gives you an overview of a given industry when you’re looking to first engage with a potential client, understand what’s going on in their space, and get some key talking points.

The most important section of this chapter for business valuation professionals is the Executive Summary. This section details what has happened in the industry in the past 5 years, what’s going on right now and what’s projected to happen in the next 5 years. You can copy and paste this section into the business portion of the valuation you’re working on (don’t forget to reference IBISWorld).

Industry Performance

This section covers the year-over-year growth and decline of a given industry.

The Key External Drivers section shows you factors that are outside of a business's control but can still affect its bottom line. This section includes an interactive graph to compare industry revenue to a given industry’s key external drivers, as well as insights into each key external driver.

The Current Performance section tracks a given industry’s year-over-year percentage change in revenue. As you can see in the chart below, the Dentists in the US industry had a drop in revenue (the solid blue line) in 2020 during the start of the Covid-19 pandemic then had an increase in 2022, now it’s projected to level out over the next 5 years.

An example of the Current Performance chart showing Industry Performance

The interactive chart in the Current Performance section also allows you to compare a given industry’s revenue against Industry Value Added (IVA), Establishments, Enterprises, Employment and Wages. This chart, along with all other IBISWorld charts, can be exported in multiple formats by clicking the icon on the top right-hand side of the chart, as seen in the image above.

The remainder of the Industry Performance chapter contains the analysis backing up the various data in the charts as well as the raw historical data for the industry.

Industry Outlook

The Industry Outlook chapter projects what the next 5 years of growth looks like for the industry using IBISWorld’s proprietary forecasting methodology.

An example of the Industry Outlook chapter, using Dentists in the US as an example industry

The projected trends in this chapter can answer questions related to the industry’s future, including:

  • Will there be consolidation in the industry?

  • Will awareness of this industry’s products and/or services increase?

  • What are the projected demographic trends for this industry?

  • How will technology impact this industry?

As with all IBISWorld products, you’ll also find the raw data to back up the insights at the bottom of this chapter.

Products & Markets

The Products & Services Segmentation chart in the Products & Markets chapter allows you to look at the different streams of revenue for a client that you’re valuing and compare them to the industry averages.

An example of the Products and Services Segmentation chart in the Products & Services section

The chart above allows you to ask the following questions about your client’s product or service lines:

  • Do they offer these products and services?

  • Are they overinvested in certain products and services?

  • Are they underinvested in certain products and services?

If you’re unfamiliar with the products and services within this chart for a given industry, you can find definitions and insights into each product and service below the chart.

You can also investigate revenue through the lens of market segmentation. The Major Markets section of the Products & Markets chapter breaks down where the revenue is coming from for businesses within a given industry.

An example of the Major Market section, with a Major Market Segmentation chart

Geographic Breakdown

The Geographic Breakdown chapter is used by business valuation professionals to gain more granular insights into a given industry’s regional differences.

An example of the interactive map of the US in the Geographic Breakdown chapter

The US Industry State Reports are a separate IBISWorld product that subscribers can access by clicking on any state in the Geographic Breakdown chapter. Non-subscribers can still find sortable state-level data within the Geographic Breakdown chapter.

The State Reports cover the key points of difference between national and sub-national industries for over 1000 industries in North America. They give you granular insights into local performance data and forecasts and highlight regional demographics and economic indicators.

Check out our State and Provincial Industry Reports article for more information on this product and how to subscribe to it.

Competitive Landscape

The Competitive Landscape chapter is based around Porter’s 5 Forces, giving you insights into threats of new market entrants, what makes businesses successful in this space and more.

The Key Success Factors section of the Competitive Landscape chapter allows you to look at the Key Success Factors for a business in a given industry and see if your client’s business measures up to these standards. Adherence to all 5 factors will likely have a positive impact on your client's value. When clients do not meet all 5 criteria, however, it's worth looking into why to determine how severely their value may be impacted.

An example of Key Success Factors

One of the most valuable sections for business valuation professionals is the Cost Structure Benchmarks section. This section shows you historical data from the past 10 years, detailing where revenue is spent within a given industry.

You can use the Cost Structure Benchmarks to compare how your client’s profit margin and allocation of revenue compares to averages within the industry across multiple years.

An example of the interactive Cost Structure chart in the Cost Structure Benchmarks section

Operating Conditions

The two sections in the Operating Conditions chapter that are most valuable to business valuation professionals are the Regulation & Policy and Industry Assistance sections. These sections cover how involved the government is within a given industry and the positive or negative effects that involvement has on the industry.

An example of the Operating Conditions chapter, showing the Capital Intensity section

Key Statistics

The Key Statistics chapter is where everything in the report can be broken down from a financial perspective.

Many business valuation professionals will download sections of this chapter, or the full chapter, as an Excel file in order to do their own in-depth analysis of the data. To download either the full chapter or the individual section, click on the icons shown in the image below.

The image highlights the download button located next to the industry title on the Key Statistics page

Call Preparation Questions

Before conducting a business valuation for your client, the most important step is bringing the client on board. This is where our Call Preparation Questions chapter is useful.

Our Call Preparation Questions are designed to prepare you for crucial conversations with potential clients so you can know the key questions that you need to ask them or that they may ask you. These questions allow you to be seen as an expert on your potential client’s industry and can prepare you for more in-depth and valuable conversations.

An example of the Call Preparation Questions chapter, showing Role Specific Questions

Segment Benchmarking

The Segment Benchmarking chapter is a chapter that you can add on to your subscription that allows you to view key insights for a given industry, broken down by employee-size segment.

For example, if your client is a dentist office with 5-9 employees, you can compare your client’s annual revenue growth against the average annual revenue growth for dentist offices with 5-9 employees in the industry.

As seen in the image below, you can click into the segment that aligns with the number of employees at your client’s business, and find insights that are specific to their business size.

An example of the Segment Benchmarking chapter, with the employee segmentation outlined

US Industry Archives

Our US Industry Archives were designed for business valuation professionals to value a business at a specific point in time for litigation work or expert witness testimony.

Subscribers of this product can view every updated version of all IBISWorld reports going back to the first year that a given report was written. To access an archived report, use the left-hand navigation to click on the year, select a month, then download the PDF of your desired report as seen in the image below.

An example of how to download an archived report as a PDF

For additional questions regarding IBISWorld for business valuation, please contact your Client Relationship Manager. If you don’t have an IBISWorld account, please contact us to learn more about our membership options.

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