Do you have any idea how much your business is worth? If not, we can guide you through the process of securing an accurate business valuation.

A business valuation is just that: an analysis of how much money a business entity is worth. Knowing the fair value of a business is useful for many reasons, including selling or buying a business, establishing partner ownership, securing business loans, calculating taxes on gifted shares, and in the context of succession and estate planning or divorce proceedings.

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Here at SWC, where we help entrepreneurs and business owners maximize their return on investment while achieving both their professional and personal goals, we encourage you to get up to speed on the basics of business valuation, which we cover in this post:

• Why you should have a current valuation of your business
• Some common methods of valuing a business
• How to prepare so as to get the best valuation
• Some advice for improving business valuation prior to a sale or merger
• Next steps you can take with us to get a valuation done for your business

Why You Need a Business Valuation

Business valuations are not exclusively for large corporations. Even small and midsize business (SMB) owners can benefit from knowing the value of their business. For example, a business valuation:

• Reduces the likelihood of costly tax audits and penalties on your estate
• Improves the odds of being approved for a business loan, assuming the valuation supports the business’s credit worthiness
• Reveals the true value of stock/shares
• Simplifies calculations during partner buyouts
• Save heirs from extreme tax liabilities

Not every business needs a valuation. If you are self-employed (meaning, you are the business) and not planning to ever sell your business, pass it down to heirs, or borrow against it, you probably won’t benefit from undertaking a business valuation. (However, that may open the door to the more pressing discussion of why you are not building a business that you can eventually sell or pass down to your heirs.)

Here is a more detailed list of common reasons to get a business valuation: Continue reading… Continue reading… Continue reading…