As a business owner, the company you’ve built represents an extension of yourself. Not unlike a kid on a baseball field, your company makes you proud, and you’ve worked hard to bring it up right and keep it out of harm’s way. When your personal and business goals change, unexpected events arise, or it’s time for the next phase of your life, it’s critical for you to have a plan in place that supports your values, financial needs, and legacy. The level of detail required in planning is determined by the reasons behind your need to measure your business’s worth. Whether needed for M&A, a family transfer, or for owner gifting or estate purposes, business valuation services provide a good starting point to determine the next steps for your business.
Business Valuation Services for M&A
For business owners with near-term exits, the COVID-19 pandemic has presented a tough question: Should I put my exit plans on hold to rebuild and show recovery, or should I sell and exit now? Some business owners might be surprised to learn that trends show that the business owners who chose to expedite their exits have done well. Waiting to show recovery takes time. Depending on your financial standing and timeline, slowing down the process may not be the best option.
Before you move forward with selling, you need to uncover the elements that drive increases in your business’s value. Ahead of a business valuation, it’s a good idea to get your books in order. Your valuation analyst needs to have an accurate picture of your expenses to make adjustments to your financial statements, so they present your financial standing realistically.
No two business valuations are alike. Your business and life’s work tell a story, and valuation analysts understand that story is tied to certain expectations about your business’s value. As a practice, business valuation services lie where the science of valuation meets the art of professional judgment, estimation, and conclusion. Your valuation analyst will work with you to understand fair and market value and balance your expectations with historical data and the future outlook.
When it’s time to buy, how do you ensure you will pay a fair price? Enlist your valuation analyst to perform buy-side business valuation services. Working with a valuation team that is part of a full-service CPA firm can help you estimate the value of intangible assets, such as goodwill.
Business Valuation Services for Family Transfers
The pandemic has moved business valuations into a more conservative space, as there is a hyper-focus on potential risks. For business owners planning for a family transfer, a lower business value due to a tough market might work in your favor, as it may return a value that’s feasible for an expedited purchase by a family member. In addition, a lower value means lower tax liability.
Business valuations can also help you determine the next steps in planning for a family transfer, especially when you work with a valuation team that is part of a full-service CPA firm. Seeking business valuation services as part of estate planning can help ensure the proper transfer of wealth and structure an exit plan that minimizes tax liability for you and your heirs.
At LGA, we align our multidisciplinary experience to provide comprehensive business valuation, business advisory, and CPA services. Our focus isn’t just on the science of the valuation but also on the art of the process. You’ll work with credentialed professionals, and you’ll receive timely, quality work that will stand up to scrutiny by outside parties.
My team can help you determine the scope of business valuation services you need. Based on your objectives and the level of detail required for your business valuation report, my team will work with you to determine the type of report you need: Conclusion of Value, Calculation of Value, or Range of Value. We can also help you with post-transaction services, so there’s continuity of relationships and knowledge. If you’re ready to discuss the next steps for your business, contact me today.
by Frank Storniolo, CPA, CVA, MST
Frank is a Partner at LGA and the head of the Business Consulting and Valuations group. He provides business valuation services to companies whose needs arise from issues such as business growth or disputes, M&A or shareholder transitions, and trust and estate matters or divorce. Clients also call on Frank to support their business growth through advisory services such as budgeting & forecasting, benchmarking & KPIs, and tax consulting & compliance. His diverse experience includes advising privately-held businesses and their owners in an array of industries.