7 Reasons You Might Need a Business Valuation
Valuation schmaluation! I don’t need no dad gum bean counter telling me what my dealings are worth! ... Said no one ever (except maybe one guy with an Airboat rental/alligator farming business whose muskrat leftovers were just gobbled up by his 86-year old bloodhound), but that’s beside the point.
The reality is, there are some very specific reasons your business may need to get a business valuation. Or perhaps, you need help coming up with a plan to maximize the value of your business? Hiring a credentialed professional can certainly help to attain your objectives in business or help you through some not-so-friendly court proceedings.
Here are 7 reasons to get a Business Valuation:
- Change in business ownership- whether it be part of retirement/succession planning or a new partner coming on board
- Merger or sale of business- how do you know if the price you’re being offered for the business is fair?
- Going through a divorce- the court decrees all assets to be split, including your business. You’ll need to determine how much it’s worth before splitting it up
- Partner/Shareholder disputes- might involve court proceedings
- Establishment or annual update of an employee stock ownership plan (ESOP)
- Estate planning/tax purposes
- FUN! Seriously, all the kids are getting them. You don’t want to be the only business on the block without a certified business valuation, do you?
Before Hiring a Professional Please Consider the Following:
- What do you need the business valuation for?
- Does it need to be issued by a certified professional?
- Should the matter move into the courtroom, do you have confidence in the valuator’s ability to testify?
These are just a few of the most common reasons you might need a business valuation. There are different levels of business valuation reports and they vary in price and in complexity. It is best to find out what is required before engaging a professional.