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Business Valuation

Shouldn't you know what your biggest asset is worth?

Most business owners think of business valuation as a necessity when reacting to an event like retirement, death, a business dispute or divorce. But the best time to do a business valuation is long before a triggering event occurs. Business valuation should be the first step in succession planning, rather than the last.

What is a business valuation?

A business valuation is a professional review of a business to determine its real-world market value. At its most valuable level, a business valuation is a tool for building value and providing owners with greater flexibility. A good business valuation identifies a business’s key value drivers and anticipates what effect management decisions will have on value.

Reasons to have a business valuation:

  • Understand the value of your business in relation to your overall financial and estate planning
  • Factor the value of your business into your retirement plans
  • Plan for the succession of your business to a younger generation of family owners
  • Plan for the eventual sale of your business
  • Establish your bargaining position in a potential business merger
  • Bolster your creditworthiness
  • Determine the viability of your business growth plans
  • Create a buy-sell agreement with your partner/s
  • Establish the value of the business as a marital asset

Questions every business owner should ask about business valuation:

  • Why does business valuation matter to me if I’m not planning to sell my business?
  • Why should I work with a business valuation professional 5 years before selling my business?
  • What can I do in the everyday management of my company to enhance its value?
  • Who should do my business valuation? 


David J. Keyo Jr., CPA

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