Knowing The Market Value Of Your Business
If you're a business owner, like most, the business is the largest investment. Knowing the market value of your business is the first step toward formulating the most appropriate succession strategy.
No matter what you envision for the future of your business to be, the first step is to determine its fair market value. While you may be tempted to assess this value on your own, it pays to have a professional valuation performed.
For instance, you may have a good idea of the current market value of the plant and equipment, but tangible assets are likely to comprise only part of the business' worth. It also has intangibles, such as goodwill and going-concern value. Determining the value of a privately held business is a complex task.
An accurate valuation puts you in an excellent position to:
- Negotiate a sale on the most advantageous terms
- Sell a minority stake
- Execute a buy/sell agreement
- Develop an estate plan
- Create a succession plan
Even if a sale is not imminent, a professional valuation will give you information about:
- Comparable companies in the same industry
- Economic conditions in the industry
- Strengths and weaknesses of the company
As a business owner, you can use this information to enhance the value of your business now and in the future.
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