How Often Should I Have a Business Valuation Done?

The number of business owners who either do not know or who have the wrong idea about the worth of their businesses is surprising. For the most part, this is because these owners do not place much stock in having business valuations done on their companies. After all, why should they dedicate significant time and resources to a business valuation when they are not ready to sell their businesses? Others may not be interested in knowing the true value of their businesses so long as their firms report profits year after year. However, as a business owner, you need to understand what a business valuation is and why it is important for your business to have one done. Additionally, knowing when to have a formal valuation done on your enterprise could influence the trajectory of your business. Below we will discuss some of the reasons to have a professional value your company and how often to do it.

My business is worth WHAT?!?!

At the time of retiring the average business owner in Australia does not have a funded pension beyond what they have set aside in their own and their spouse’s Superannuation; most will have a personal residence that has only recently had the mortgage paid off and less will have a significant investment portfolio. Remember, these are averages so your circumstances may be better or worse off. In many situations the family business will be the most significant financial asset available to provide for the owner’s retirement years. You should be asking yourself several questions, but are you ...

How long does a Business Valuation take?

At one point or the other, an entrepreneur may find himself in need of a business valuation. Valuations are the estimates of a business’ worth as assessed and reported by a professional. Business owners typically get valuations for their enterprises when a partner leaves the firm, or when they want to sell their companies or take them public. As with all reports in the business world, this one takes time to conduct and report accurately. However, not all valuations take the same amount to compile. Some businesses may wait longer to get an estimate of how much they’re worth than others after engaging a professional firm. Here we look at why this is.

Are you looking to leave your business partnership? Here are some points to consider.

There is no question to the fact that leaving a business can be one of the most difficult choices you have to make. Whether it is as a result of personal issues, disagreements or even for health reasons, the journey through leaving your business partnership is likely not to be an easy one. However, your mental health and happiness are essential. With that in mind, staying in your business may be doing more harm than good. In case you feel like you do not want to continue working on your business, there are a few things you can do to help the dissolution process take a lesser toll on you, your partner and the enterprise you worked so hard to help build.

Is your business valuation firm independent? Are they compliant?

Business valuations can be done for many purposes. You may be planning to sell your business, one of your partners may be leaving, or you may be undergoing a divorce that requires the sharing of assets. Alternatively, you may just want a business valuation to help you get an accurate view of the worth of your business. This could spur new strategies in your production, management and how you engage customers so as to increase profits and improve the business’s value. Going to the right business valuation firm based on your reasons for seeking a valuation is almost as important as the process itself. This is especially so if the reason for your valuation involves legal action. For such reasons, it is essential to seek services from a valuation company that is both independent and compliant.