"When it comes to putting a price tag on your business, quick estimates and best
guesses are never enough."
So what happens if you are contemplating retirement
or selling a business, going through a divorce, or
ending a partnership? How will you determine what
your business is worth?
Some of the common reasons why a
business valuation might be required
are:
Estate and gift tax planning
Purchase, sale, or merger of a business or business interest
An evaluation of the company's current
strengths and weaknesses must be made, in
addition to analyzing the competitive and
economic factors that affect the business.
The capabilities of management as well as
management depth also impact the value of a
business. Issues related to control and
marketability found in the business interest
must also be considered.
Practice
Areas
Ownership in a closely held small
business often represents a large and
significant part of an individual's or
family's estate and investment
portfolio. Unlike owning stock in a
public company, where you can simply
look at the stock exchange to find how
much your shares are worth, the market
of an interest in a private, closely
held business is generally unknown and
usually quite complex and challenging to
determine.
The true value of a business is
uibased on two types of assets-tangible assets,
such as real estate, machinery and equipment, etc., and intangible assets, such
as goodwill, trademarks, patents, customer lists, etc. Often times, the value of
a company's intangible assets are substantially greater than its tangible
assets.
Properly valuing a business requires substantial skill, experience and training
on the part of the business valuation advisor. A thorough analysis of the
business must be made including a complete historical financial analysis to
determine the true profitability, its future earnings potential, and overall
financial health.
To accurately determine the value of a
closely held business, the business owner
should consult with an experienced business
valuation advisor.
Practice
Areas