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Why should I get a valuation of my
business?
With recent changes in the
tax laws, publicly traded companies are required to have a
valuation of their businesses, however there is no such
requirement for non-publicly traded companies. CEOs and
presidents of many of those companies do not have current
valuations of their companies and have never had one. The
following are reasons why you should know what your company
is worth:
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1. Know what
your company is worth.
Many business owners have no idea what their business is worth; and
if they think they know, they are probably wrong. Sentiment often
gets in the way of good judgment. For a fair and independent
opinion, CEOs and owners should obtain a professional business
valuation.
2.
Understand where your company fits in the landscape.
A business valuation will research and provide an explanation of
your specific industry and will place your company in the
competitive landscape of your specialized market. It will also tell
you the market price of publicly traded companies that are engaged
in your line of business.
3. Learn the
financial condition of your company.
Business owners may think they understand the financial health of
their company, however having an independent review and analysis
including intangible assets can confirm or deny the theories.
4. Make fast
decisions on buying, selling, and mergers. If you are faced with the option to buy, sell, or attract capital for
your business, you may not have time to wait to have a business
valuation completed. Having a current valuation will enable you to
strike while the iron is hot.
5. Stay
current. The market is in
constant flux. It is important to get regular business valuations
because your company, your industry and the economy are continually
changing. A business valuation report, completed by an accredited
valuation expert who is a member of a professional society working
in compliance with established professional standards, may be
appropriate for use in courts, for financing and for tax challenges
as needed.
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