As a business owner, are you feeling the need to palpably see to what extent your business is progressing? Are you thinking of raising funds for your startup, or for expanding an already established business empire? Are you thinking of taking your company public? Are you looking to sell your company and move on to other things? If your answer to any of these questions is yes, you might have a very strong case on your hands to get your business professionally evaluated through tried and tested methods of business appraisal valuation.
Engaging a business valuation firm is not a decision to be taken lightly — business appraisal services certainly do not come for cheap, and your motivation might be channeled by the results that you get. Keeping all this in mind, is it the right time or scenario to have your business appraised and valued by a business valuation firm? Let us find out.
Before you contact a company that performs business valuation services, there are a few considerations you have to make and a few things to understand. It all starts with figuring out why you need your business appraised and, when you have a concrete idea about your motivation and the results you are looking to achieve, gathering up the data needed to start the evaluation process. Valuing a business is, in essence, a financial analysis exercise which requires your balance sheets and income statement for the last few years, and uses different methods of projecting your overall value according to the market state and your requirements. Now that you have the “how”, let us get deeper into the “why” of business valuation — the most important part that you need to participate in.
Why Would You Engage a Business Valuation Firm?
Essentially, there are only a few different business scenarios where you would require your business to be appraised. According to the scenario which you find yourself in, business valuation analysis can deliver results which can be of benefit to your cause. Let us take a detailed look at some usual motivation.
Knowing Where You Stand – The simplest reason that you might want to get your business evaluated is to know where you stand with respect to your market, and how much along has your business come along relevant to the business goals that you have been trying to implement. To go further and take your business to new heights, an honest self-assessment is often necessary, and evaluating your business will allow you to see exactly how far things have gone according to plan. You can take things from there and continue employing measures which have evidently been successful and cut down on the ones that have not borne fruit. An evaluation that exceeds expectations is also a good way to keep employees motivated and driven.
Fundraising – Any kind of fundraising drive requires an evaluation of your business, for different reasons. If you are trying to fund a startup, an overall evaluation is needed for you to calculate how much you can borrow, and what percentage of your company you can logically think of giving away to the investors in return of seed money. If you run an established business, or are thinking of taking your company public, having a concrete evaluation at hand is of paramount importance, as it helps decide the course of events from there on.
Selling Your Business – A time might come when you consider selling your business and moving on to greener pastures. This is one time when having a business valuation firm carry out a thorough assessment if of great importance. Only a concrete evaluation carried out by a reputable business valuation firm can ensure that you get the right price for your company. A monetary evaluation is also important to the legal side of things, the drawing of the necessary paperwork and to work out tax issues.
In any of these scenarios, performing a business value assessment can serve you well and play an instrumental part in the fruition of your plans. Select the right firm to do it for you, and you should be good.
