Reasons for Valuations

Business valuations are often required to get an idea of value when buying or selling a company.  Some times your banker or insurance company requires you get one.

Not all situations are this clear cut.  In many cases, “proper prior planning” just makes good sense.

That said, here are a few other situations we deal with:

  • The Unhappy Ending.  A situation we’ve run into more than once… what happens if the business owner unexpectedly dies?  A valuation can help your family make informed decision as to how to proceed with the business.
  • The Unexpected Offer. If your business is even marginally successful, there’s a good chance that someone will eventually make you an offer (and often with a tight deadline).  Having an understanding of value helps you understand if those conversations are worth entertaining.
  • Shaky Marraige. If your marraige is likely to end, your business is likely to be a central point to the proceedings.  We’ve seen proper valuations impact marital dissolutions by hundreds of thousands of dollars.
  • Are you ready to retire? Most business owners have their retirement tied up in illiquid assets- namely, their business.  If your retirement plan is to sell your business, isn’t it a good idea to know how those funds will support your golden years?

Have thoughts on some other reasons?  Give us a ring, or leave a comment below.