Business valuation is used to set the fair market value of a business, in other words to know how much the business is worth. This analysis is useful in various situations, such as a transaction (purchase or sale of a business), tax reorganization, integration of a new shareholder or in the context of litigation.
When comes the time to have their business valued, the owners' biggest concern is to maximize the value of it. Seeking an expert in business valuation provides not only an objective and independent value, but also guarantees a suitable transaction in terms of taxation while making sure that no money is left on the table.
The valuation is based on the analysis of different types of information, for instance financial statements, budgeting, business plan, client list, salaries, etc. In addition to providing a thorough evaluation, experts in business valuation, due to their experience and knowledge of the market, are also able to assist with ideas for investment or acquisition projects or any other element that could help maximize the value of a business.
While most business owners only play along when they have an offer on the table, it is quite profitable to have one’s business valued on a regular basis, for example every five years. Indeed, a thorough and rigorous evaluation may require a period of 5 to 7 weeks. In the event of a quick transaction, knowing the value of one’s business allows one to get a realistic basis for negotiation with the buyer.
Given the current context of retiring baby boomers and the importance of ensuring the next generation, business valuation is particularly important in any situation of business transfer, whether small or large.
Reach us for business valuations, talk to us and get more information on the benefits of getting your business valuation done by a certified Business Valuator.