Business valuations are done for many purposes and ultimately to answer the question — what is my company worth?
Many business owners think they only need a business valuation if they are looking to sell their company, but this is far from the truth. Knowing the worth of anything you own, whether it’s your car or the balance of your IRA account, is important for future planning. Likewise, knowing your company’s worth can help you make informed business decisions.
At YEC, we can put you in touch with friendly experts who will take care of you through the entire valuation process with special member discounts available. To get started, contact me at Beth@yec.co.
(Note: This benefit is for YEC members only. Click here to find out if you qualify.)
While you may indeed be interested in selling your company, a business valuation also serves the purpose of providing the basis of a fairness opinion, filing estate or gift tax returns, and meeting FASB, SEC or ERISA reporting requirements. Valuations are also used in litigation, raising capital and executing buy/sell agreements.
Here are some other top reasons to get a valuation:
- You’re selling the company. You may be thinking about an exit strategy in 2-4 years.
- You’re looking to raise capital. Valuation determines the share of the company you have to give away to an investor in exchange for financing.
- You’re issuing options, profits interests, or restricted stock to employees or advisors (409A). When you offer deferred compensation arrangements to employees, you must ensure the price is compared with an accurate fair market value of your company’s common stock as of the option grant date.
- Your business has intangible assets. These can include patents, trademarks, copyrights, business methodologies and more — all of which affect valuation.
- You or your partner is leaving the business. You need to know the value of your business if you want to buy your partner out or vice versa.
- You’re considering a merger or acquisition. Fairness or quasi-fairness opinions require an up to date valuation, which allows you to move more quickly on potential opportunities.
To get started today with your independent valuation, contact me at Beth@yec.co.