What is a business valuation?
A business valuation uses a set of procedures to determine the economic value of an owner's interest in the business. This process involves a thorough analysis of the company's history, current capacity, future opportunities, and operating structure. Through this in-depth review, business valuation specialists will be able to objectively determine a fair market value for the business.
Why do you need a business valuation?
Some of the purposes for having business valuations performed include an upcoming transactional agreement, estate and gift tax planning, stock compensation arrangements, eminent domain, and succession planning. A business valuation will be needed in the event of a legal action such as bankruptcy, divorce, and shareholder disputes.
Having a business valuation performed is a way to strengthen your relationship with your bank and is often a requirement for funding a business line of credit. The information that a business valuation provides will help your bank to better understand your business and feel more comfortable with extending credit.
We've talked about funding buy-sell agreements with life insurance. Having a business valuation performed will allow business owners to purchase life insurance based on the required liquidity to keep the business running. For this reason, business valuations are a vital part of succession planning and the transfer of business ownership.
The importance of choosing an experienced and knowledgeable partner to value your business.
Just like with all other aspects of your business, you want to choose a trusted and knowledgeable partner to value your company. Our team of experienced business valuation professionals use generally accepted methodologies to determine the tangible and intangible value of the assets that make up your business. Our extensive knowledge of business valuation principles and expertise in federal, state, and local tax and securities laws allows us to provide you with a credible business valuation that offers an understandable result.
To protect the livelihood of your business, please contact us at Summerlin-Roberts to learn more about business valuations and how to get the process started.