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7 Advantages Of A Professional Business Valuation
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While a few business owners are aware about their business’ worth, others are simply clueless. Do you actually know how much a potential buyer would be willing to pay for your business?
True value lies in the eyes of the beholder and value differs according to diverse value definitions. Fair market value (FMV) is a wonderful initializing point as it takes the view of a potential buyer and is a highly common value definition that applies in several situations.
Here are 7 benefits to having a professional valuation performed on your business:
1. Improvises business value – A business value offers a benchmark from which to measure value enhancement and also assists in recognizing the main value drivers. Documentation of the growth in value over a period of time increases the business attractiveness which assists in maximizing the cost that a buyer may be willing to pay for the business.
2. Family Wealth Management – Privately held businesses often represent a notable percentage of a family’s wealth. Business owners simply may not be able to manage and protect their family’s wealth prior to knowing the value of their family assets (which includes the business). A professional valuation also helps the family in case they get an unwanted offer.
3. Pre-Sale Planning – Buyers will only give top dollar for highly attractive businesses. A valuation may assist the business to be more liquid and more conveniently monetized.
4. Sale of Business to Third Party – utilized as a basis for negotiations with potential buyers (e.g. judging asking price, evaluate unsolicited offer, etc.)
5. Internal transfer of business – Establishes a price for a shareholder buy-out, management buy-out or employee share ownership plan.
6. Tax and Estate Planning – offers support for the value transferred and acts like an insurance for potential disputes with CRA (e.g. estate freezes, reorganizations, related party transactions, etc.). Price adjustment clauses might be disregarded by CRA if it judges that a proper valuation was not conducted during transfer time.
7. Life Insurance Coverage – A valuation offers business owners with third party evidence for making sure that proper life insurance is necessary. (like key person or buy/sell agreements). This offers the shareholders with peace of mind about adequate protection of their families or businesses.
You too can avail the advantages of carrying out a valuation of your business. Amongst several firms providing Business Valuation services in Gold Coast, Australia, JWA Business Valuations is the leading one. It is focuses completely on offering valuations for all industries and business types. It holds the highest standards of business valuation credentials in Australia as it is a part of the Institute of Chartered Accountants “Business Valuations Specialist” group and is also accredited with Bstar’s Value Improvement Benchmark Advisory group.
JWA Business Valuations emphasizes on offering quality business valuations to small and medium sized businesses across Australia. It is comprised of a team of expert Business Valuators and qualified Chartered Accountants, each of them having an extensive history in business valuation, valuation improvement, meticulousness and business sales.
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