Do you know what your business is currently worth? Can you put a dollar figure on your company’s assets? It’s hard for a business owner to make plans for their financial future without a recent and accurate business valuation. There are a variety of reasons why this might be necessary. If you’re facing any of these scenarios, it might be time to consider a business valuation.
Considering selling or buying a business
When you buy a new house, a home appraisal gives you the confidence to know that you’re not paying more than the home is worth. A business valuation serves the same purpose before the sale of a business. It assures the seller that they’re getting what the business is really worth, and it assures the buyer that they’re paying a fair amount.
Facing divorce proceedings
When a business owner is going through a divorce, it’s important to know the business value because the business is not only a marital asset, but usually serves as the primary source of income. Courts will rely on the evidence introduced and it will be important to have a valuation done by a qualified individual.
Going through litigation
Establishing a company’s value is often a required part of legal proceedings involving that business.
Owing estate and/or gift tax
If a business is part of someone’s estate, the accurate value must be verified before estate and gift taxes can be calculated. For estate planning purposes, a business valuation may be not only useful but required by the IRS. Only valuations done by certified valuation professionals are allowed.
The stakes are high in all these scenarios, which is why your business valuation isn’t something you can trust to just anyone. It’s important to have an accurate business valuation done by a qualified business valuation professional. A qualified individual will use the proper technique and valid analysis to come to a valuation that can be justified and, if necessary, defended.
The LGA business valuation team includes professionals who can both complete your business valuation and assist with achieving your ultimate goals around selling, buying and/or estate and gift planning. Contact LGA today to learn more about business valuation.
By Paul Vasil