You might be surprised to learn that preparing your business to hit the market is just one of many reasons why business owners hire an outside consultant to do a business valuation. If any of these scenarios fit your situation, it’s probably a good time to discover how much your company is really worth.
Judicious Financial Planning
When working with a financial planner, knowing what your business value is will improve their ability to accurately predict your personal plan and make smarter investment decisions accordingly.
Efficient Estate Planning
If you haven’t executed or used your exemptions for estate planning, a business valuation can put you in the best position to maximize tax efficiency, especially with estate tax law changes in the forefront.
Improved Goal Setting
The true value of a family-owned business is often unknown to the owners as some time may have passed since the last business succession. In order to set appropriate future goals, the current value of the business should be determined.
Secure Partnerships
A business valuation is the only way to make sure that the buy-sell agreement you’ve entered into with your partner makes sense as it pertains to the business value.
Family Succession
Transferring some of the business to your kids is a great way to pass on wealth at critical junctions in your children’s lives, but without knowing your liquidity needs you’re at risk of giving too much away too soon.
Don’t Give Too Much Away
Creating a plan to keep your key employees by sharing what they will build beyond where you are today is a great strategy for planning a successful business transition, but if you wish to retain everything you have already built, you will need to know the true business value at the time of transition.
Keep a Buyer Honest
When you have someone who wants to buy your business but you need to keep them honest, a business valuation will accomplish this goal by maintaining multiple options for exit.
Just in Case
If your spouse has no clue what you have built and you don’t want your loved ones to be unprepared if something were to happen, a business valuation will illuminate and document your business’s value and provide a roadmap to succession in a worst-case scenario.
Keep Pace with Change
If your business is operating in a fast-growing space, you need to understand how value changes with the size of your business.
Don’t Miss the Boat
When the writing is on the wall for your industry and trends are pointing to a decline, the smart move is to exit before it is too late. A business valuation is the first step towards preparing your business for sale.
Quest Business Valuation Services
As part of our Explore services offering, Quest’s business valuation can provide you an accurate number for what your business is worth. In order to plan for your business and personal goals.
We’ll also provide actionable insights for increasing future valuation, uncover opportunities for growth and help minimize your tax exposures while outlining a plan to maximize your personal net worth.
