Do you know what your business is really worth?
Do not assume that business valuations and assessments are only for business owners deciding to sell their business. More often than not, when an owner of a typical small to medium sized business commits to an exit strategy, such as a sale or succession plan, it is sometimes too late for the business to become 'sale ready' and for the owner to achieve maximum returned value. This can be avoided with a proactive approach and present day considerations of your business through a valuation process.
Valuation assessments can be powerful business planning tools when they are used for ongoing benchmarking and performance management. Such an exercise is an effective driver of business change and growth. It is also commonplace for valuations to be used in situations where you need to minimise the risk of dispute due to the potential taxation, or even legal implications. It may be highly beneficial and often recommended that you consider the following types of valuations which can be performed and when they may be necessary for you:
- Tax-based valuations (restructuring, group consolidations or ownership transfers/changes - especially related parties)
- Family law valuations (matrimonial, death or family disputes)
- Strategic business planning valuations (for ongoing use in business improvement/growth strategies)
- Business purchases and sales (including succession planning)
- Capital raising or other financial requirements (financial institutions and insurance providers etc.)
Valuing a business is not an exact science. It is also subjective to the purpose of the valuation and will vary due to the complexity in methodologies that are involved.