Starting your own business and making it successful is no easy task. It takes a tremendous amount of dedication, passion, perseverance, and hard work to build a stable company that is profitable. You have likely worked countless hours and potentially invested some of your own money to get the company started.
If you are interested in selling your business, one of the first things to do is get a business valuation. While you may think the value of your company is high, the valuation will help you understand the value potential buyers will assign to your company. The valuation should consider multiple approaches to properly take into consideration.
Even if selling your business is not something you are currently considering, it is helpful to have an accurate business valuation for exit planning, tax planning, estate planning, or many other reasons. Once you have completed a valuation, it is fairly easy to update it annually.
A business valuation is helpful for tax purposes.
When you are filing your business taxes each year and complying with tax regulations, having an updated and accurate value of your business will help you in developing your tax strategies.
A business valuation is essential during strategic planning.
Having a business valuation completed will make it easy for you to see year to year comparisons of your business’ financial performance. Additionally, this information can help you identify any existing weaknesses, determine plans for improvement, and prepare for the future.
A business valuation is the first step in coming up with an exit solution.
Whether you want to sell your business or exit your ownership position, you need to know the value of your business. It will provide you with a current market value of your business. This will help you determine if selling your company makes sense right now.