Here are 3 situations that a business valuation is needed.
Business/Asset Valuations for Financing – Lenders require an independent business valuation prior to approving a business loan or a credit line.
Sale of a Company -Determining a fair market value of a business is the first step in the process of selling a business. A valuation prepares you for negotiations and positions you to respond to buyer’s needs. It identifies sources of value and areas of your business that can be improved to increase profitability either before selling or after buying.
Exit Strategy Planning – Your business planning and exit strategy should begin well in advance of your exit from the business, and it should address both voluntary and involuntary transfers. A valuation with annual updates will keep you prepared for both the expected and unexpected sale of your business. Most importantly, it will ensure that both you and your next of kin have access to accurate information regarding the fair market value of your business and avoid unnecessary loss of capital due to inaccuracies or lack of clarity.
Contact a broker for more business valuation information.