Why should you have your business valued?

 

Do you know what is the worth of your company? Isn’t it your responsibility to know its worth and work on improving it? In case you didn’t know, it is not too late. A business appraisal is a process which basically dissects your financial situation and lays bare your options and capabilities. It provides an opportunity for any business to know its strengths, weaknesses and how to optimize your assets for maximum profitability. Here are a few reasons why people get their businesses valued.

Common reasons for business valuations

  1. Selling your business: This is by far the most common reason and in many cases the only reason for business valuation. The seller wants to ensure that he gets a good price for his business while the buyer wants to be satisfied that the business is worth the money. Business valuation provides valuable insights into the health of a business and its future prospects.
  2. Death of an owner: Family owned firms are often entangled in legal issues with each member wanting a share. The executor is pressurized to settle the will at the earliest. But ensuring that everyone gets a fair deal is tricky without the help of an unbiased business valuation which will present the correct picture to all parties involved. This will help the involved people to reach a decision if they want a speedy settlement or a profitable one.
  3. Divorce: When it is a joint venture between a husband and wife the scene gets murky with each wanting the maximum share when they separate. It is at such times the business valuation is a boon because it will provide the fair market value and this will ensure that each side gets what is their due and nothing more.
  4. For additional financial help: When seeking an external loan to improve your business from banks or other third parties they require a business valuation report to ascertain that you are in a position to pay back the loan. Your old records do not suffice because real estate keeps changing value, and manual records can have errors that you might have overlooked. When you employ the apt methodology appraisers they have the required expertise to determine your current worth, and an appraiser’s report is accepted by all banks.

Thus, whatever your reason for evaluating your business you must ensure that you use a certified appraiser and you use the information gathered to improve your business

 

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