What Is Your Valuation Need?

The circumstances in which one might need an opinion of value on a business are many. From buying and selling a business, to funding a buy-sell agreement, to a divorce- these are just a few of the circumstances in which a valuation will assist in adding clarity to what is typically a challenging situation.

The following questions are intended to jump-start your thought process as you consider your own situation. If you can identify with any of these, then you might want to discuss the possibility of obtaining a valuation on your business.

One piece of advice- whatever the reason why you think you might need a valuation, please avail yourself of the right information related to discovering the potential value of your business.

In other words, do not rely on quick multiples or "back of the napkin" guesses. 

      

These quick-and-dirty methods (eg. 1 year's sales, 5 x profitability, 2 years profitability + inventory, etc, etc) might have their place, but using them as an anchor-piece in making major strategic decisions regarding your business is potentially very damaging.

An expert relies on several factors specific to your business to be able to determine its value- don't allow what's potentially very significant information contributing to the value of your business to be overlooked by the use of a generic method that might have no bearing on your specific situation.

We are just a phone call or email away; contact us and we will discuss your situation in confidence.

Buying or Selling a Business

  • Are you looking to purchase an existing business, and are you in need of an objective method of judging whether the price quoted to you is truly representative of the value of the business?
  • Are you in the position where you need to sell your business, and need to justify the price to a prospective buyer?
  • Do you know anyone who is curious about what might need to be done to increase the value of their business before it is sold?

Partnership Dynamics

  • Do you have a business partner with whom you have trouble working? Might it make more sense to offer him/her a dollar amount for his/her share of the business?
  • Is there a potential partner who you are thinking of bringing into the business? Is it possible to offer him/her a package, anchored by the value of the business?
  • Does your partnership agreement dictate that the business be valued in the event of irreconcilable differences between you and your business partner?
  • Do you have a minority owner who needs to be bought out of the business? Do you need to understand more clearly how Discounts for Lack of Control (DLOC) and Lack of Marketability(DLOM) impact the gross value of their shares?

Divorcing

  • Are you or your soon-to-be ex-spouse the owner (or part-owner) of a business?
  • Do you need to be educated on what the ramifications are for your business interest when you divorce?
  • Would you like to have a conversation with your spouse about valuing the business as part of an amicable, or collaborative, divorce process?
  • Are you of the opinion that you will not come to an agreement with your spouse regarding the value of your business, and are in need of a valuation that will need to be supported and defended in court?
  • Do you have questions about the way that your (or your spouse's) goodwillis treated in these situations?
  • Are you curious about how the different types of goodwill (personal vs. enterprise) figure into the entire equation?
  • Is it your opinion that the valuation performed by "the other side" is too high (for your business) or too low (for theirs)?

Strategic Planning

  • Are you the owner of a business who is contemplating retirement, and you want to know what your business is worth today?
  • Might you want to know what to expect in a potential sale of your business? Would it be worth it to understand the different factors that drive the value of your business?
  • Are you the owner of a business who wants to consider what your business might be worth one day?
  • Are you being approached by another business owner who wants to purchase your business? Or might you be the one considering purchasing an existing business?
  • Is there another company that you think might represent a strategic alliance for you, and you want to consider making an offer to the owner?
  • Are you looking to sell your business, and are wondering what changes might need to be made to it for it to be worth more when it is eventually being marketed?

Miscellaneous Situations

  • Are you the owner of a business who is looking to "gift" shares to a potential heir?
  • Do you need to raise funds for a potential expansion, and are in need of a valuation to support your case to a financial institution?
  • Do you have a "buy-sell" agreement, and need to have a valuation for purposes of funding it?
  • Are you in need of a "second opinion" of a previously performed valuation?
  • Do you have a "C-corp" business that needs to be converted to a "sub-chapter S" corporation or LLC? The IRS requires a valuation for this type of transaction.
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These are a few of the situations in which you might find yourself where a valuation will assist greatly in solving the problem that you face. We look forward to the confidential conversation with you that will allow us to add clarity to the way forward for you, and helping to resolve your situation in a way that represents your best interests.

Contact us today to begin that process.

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