Business Valuations

VALUATION OVERVIEW

Valuing your business must be an unbiased approach, especially when you are selling the business, applying for financing, and for a variety of other reasons. 

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BUYERS vs. SELLERS

But here's the catch – the buyer would want the price to be on the lower end, whereas the seller would like it to be higher. 

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For investors, value translates to a higher return than the risk of losing an investment. For the acquiring company, it's about the strategic benefits they'll be obtaining. Both would expect a lower appraised value since that will get them a greater return. But from the entrepreneur's perspective, they'll want a higher valuation.

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So, it is tough to determine the true and competitive value of the company. But as s business owner, you would want to ensure absolute accuracy and thoroughness of the process.

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At Out of the Box Coaching, we believe that valuations are a foundation for further negotiation and get you closer to the final sales price.

 

WHY HIRE A VALUATION EXPERT?

Hiring a valuation expert can help you in all aspects of business valuations and business transitions at a given point in its life cycle.

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Business valuation is an important tool business owners, investors, and other stakeholders use to make informed decisions about buying or selling a business, mergers and acquisitions, financial reporting, tax planning, and other purposes. 

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BENEFITS GAINED FROM A PROFESSIONAL VALUATION EXPERT

Using the expertise of a professional can prove beneficial in providing real value for the company and validating whether it will help you achieve your financial goals. 

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The exact specifics of the process will depend on your unique circumstances and the purpose of the valuation. A professional appraiser or business valuation expert can help determine the appropriate way forward and provide a detailed analysis of the business' value.

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OTHER USES OF A PROFESSIONAL VALUATION

In addition to having an estimated worth of your business, valuation tools can also be utilized for dispute resolution in the following scenarios:

• Estate and gift taxation

• Divorce proceedings

• Establishing partner ownership

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Other benefits of business valuation services may include:

• Analyzing the performance of your business on both horizontal and vertical levels

• Determining a realistic business value for a successful merger and acquisition

• Having a fantastic road show if you’re planning to go public

• Attracting potential employees and planning benefits for the current workforce

• Getting approved for a loan

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ENTREPRENEURS BENEFIT FROM VALUATIONS

Business valuations benefit entrepreneurs in so many different ways. But we have often seen that many business owners do not seek to get their business valued by an experienced valuation expert. They do not recognize that expert assistance is truly beneficial for the future of their business and that these metrics can enable them to have the upper hand in a variety of situations.

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Even if you figure out that now isn't the right time to take the leap, you at least get a road map to help you make the needed adjustments to your business in time. You can prepare for your future transition while also avoiding any conflicts along the way.

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We hope this at least gives you an overview of your question, "What's my business worth, and do I need a valuation?" It will help you set up a solid framework for separation when you decide to leave the business. 

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When you're ready, get expert advice and allow the specialist to devise the right action plan.

Contact the Out of the Box Coaching analysts for better assistance. 

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