Every business should have on hand a business valuation, which is updated every year. Like a current resume and business plan, a current business valuation can allow you to take advantage of opportunities, protect your family in case something happens to you, and allow you to move quickly when you are ready to sell your business. This article presents the concepts involved in business valuation and discusses how to construct a business valuation.
As with any discussion of new ideas, definition comes first. Learn what a business valuation is and what it involves.
Things happen, in business as in life. Just as you should always have a resume ready, and you should keep your business plan updated, you should prepare a business valuation and update it every year. Here are some reasons why you might need that business valuation report.
Answers to common questions about business appraisers.
Learn what a business broker can do to help with the sale or purchase of a business.
If you are considering selling a business, here is a list of documents and information you will need to put together. Pay particular attention to the first two items: 1) What is being sold? and 2) What is NOT being sold?
Businesses can be valued in several ways, depending on the circumstances of the valuation (sale or bankruptcy, for example). If a business is being offered for sale, more than one valuation method may be presented, s part of the business valuation report.
Sections of a business valuation report, including an economic analysis, industry analysis, and discussion of valuation methods used.
Before a business valuation report is prepared, the company's financial statements are adjusted, to remove discretionary items and one-time occurrences, and to bring accounts to current market value.
The "value" of a business is not necessarily what some experts puts into a business valuation report. There are many intangibles to consider, including these three points.