Knowing your worth isn’t just a valuable bit of personal advice, it’s also excellent business advice. Knowing the worth of your business — the true worth of your business — is an important aspect of running success operation and gives you the coveted upper in hand in business transactions.
Don’t rely on ballpark estimates. Instead, rely on the cold, hard facts that business appraisal services can provide. Business valuation tools and business valuation resources are excellent ways in which you can know exactly what your business is worth.
What are some of the reasons why a business owner may need business appraisal services performed by a certified business appraiser? Here are just a few.
You’re selling your business
Whether it’s a large corporation or a small “Mom and Pop” business, most if not all business owners have a rough estimate of what the value of their operation although they’ve never used business appraisal services. The process of valuation requires an expert and credential valuation professional with experience in valuing certain kinds of businesses in specific industries. The valuation process also requires accurate financial statements including forward looking income as well as cash flow projections.
You’re buying out a business partnet
Have you ever thought about buying out your business partner? Maybe a partner is nearing retirement or an owner is ready to throw in the towel to pursue another venture. Most business partnerships have some semblance of a buy/sell agreement in the event a buyout occurs. As part of that kind of agreement, it’s imperative that the business owner knows the value of the exiting partner’s interest. As such, it’s easy to see how and why business valuation services are necessary. In this instance, they’re necessary for ensuring the exiting partner is fairly compensated.
You’re getting a divorce
There’s that scary, ugly, and unsettling word everyone hates! As with personal and intimate relations, business and corporate separation is a reality that business owners face. Whether you’re grappling with a personal divorce or the end of a professional relationship, business valuation services are very much a necessity. For business and professional divorces, a business valuation is necessary in order to make both parties as whole as they can possibly can be. In the case of a personal divorce, business valuation services are great way of providing rational, clear support in what’s usually a painfully emotional situation. They provide clarity on the value of community property. For both instances, a business valuation provides an equitable transition that’s beneficial for both divorcing entities.
You’re estate planning
When business owners plan on passing their business down to the next generation in the family, business valuation services are an absolute must! Estate planning and succession may also require appraisals of some kind depending on what the estate actually owns. If you plan on keeping your business within the family by passing it down, knowing it’s worth is imperative. Keep in mind that succession planning can be a process that’s known to last up to 5 years at the bare minimum in order to properly transition.
Even if none of the above situations apply to you, business valuation services are just a great way to truly and without a doubt know exactly what your business is worth — what business owner doesn’t want to know that?
