Business owners would do well to assess their business value on a yearly basis on three fronts: market competition, asset values, and income values. The business valuation conducted by a professional expert will provide an assessment backed with facts and figures to arrive at the actual worth or value of the company. A business valuation is something that owners must have available at all times, and a yearly assessment would depict the company’s growth over the years.
Getting a business valuation is beneficial for several reasons
Concrete Knowledge of Company Assets
An estimation of a company’s worth is airy as it is a generalization. This holds no good when a business wants to obtain proper insurance coverage, or reinvest into the company, or sell the company and still make a profit. An accurate business valuation assessment with specific numbers gained from a professional valuation process is required then.
Determine your company’s value to negotiate better
If you are thinking of selling your company, it would make a great deal of sense to enlist the support of a business valuation service to determine the true worth of your business, much before it goes up for sale on the open market. Armed with this knowledge, you can take steps to increase your business value to achieve a higher selling price. At the time of negotiations you can ask for a higher price, knowing the actual worth of your company. Use black and white statistics, provided by a valuation firm, to solidify your stance on the higher selling price.
Obtain the Real Value
To sell or not to sell, to show off to a potential buyer your company’s consistent growth over the years are big reasons you should hire a reputable business valuation company to determine the real value of your firm. This will ensure you have the right numbers to showcase to your potential buyer, not vague talk based on simple data such as stock market value, total asset value and company bank account balances.
Valuation will help during mergers/ acquisitions
Knowing your company’s true worth after a professional valuation is done will help if a big company is seeking a merger with your company for as little money as possible. A business valuation will enable you to show them what the value of your company is as a whole, what its asset withholdings are, how it has grown, and how it can continue to grow. You will be able to negotiate your way to the appraised valuation numbers provided by the well-known and reputable business valuation service you engaged for the task. If you are offered less for your company than it is shown to be worth, reject the deal or offer to enter into a negotiation mediation which will help both sides come to a comfortable agreement.
Access to More Investors
A business valuation assumes importance when you are seeking more funding from investors to fuel your company’s growth or save it from financial disaster. Based on your business valuation you can provide interested investors with a valuation projection.
In summary, here are 5 benefits of getting a business valuation.
- Better Knowledge of Company Assets
- Gauging a Company’s Resale Value
- Obtaining a True Company Value. …
- Better pricing during Mergers/Acquisitions
- Access to More Investors
Once your business’ valuation has been established, establish new goals to raise up the company’s value over the next year. Set time aside every year to compare the previous years’ valuations to measure growth, losses, and notice where room for improvement is. There are different methods and mathematical formulas used in conducting a business valuation. Quality business valuation experts understand each of these approaches and formulas, and can therefore efficiently determine which will yield the type of results the management is looking for. Apart from knowledge and experience, quality business valuation experts will take the entire valuation process with serious intent to deliver results.