When you consider hiring a specialist with Business Valuations or Business Appraisals experience, what else can you receive from your investment in a business valuation? Like the majority of business owners, you see the bottom line: Your company’s value number. Nevertheless, there is so much more value a certified business valuation appraiser can offer to business owners other than time, effort, and expenses.
Here are five ways you can add value to your return on investment in a Business Valuation:
1. Use it as Part of Your Exit Plan
An exit plan begins with a business valuation. Perhaps you don’t know where you are right now. Then there’s no way to chart a path that can get you where you want to go. Share your business review with your financial advisor and CPA for healthy retirement and tax preparation purposes.
2. Use It As a Blueprint for Value Enhancement
All business valuations highlight a business’ fair market value in the first few pages. The subsequent 60 to 80 pages include all the unbiased justifications for that dollar figure. Looked at in another manner, the business valuation provides you with substantial intelligence. Which you can use to enhance and protect your potential value moving forward.
3. Use it as Your Future Due Diligence Gathering Exercise
“Time kills deals!” One of the most expensive time-related deals occurs between the agreeing to a Letter of Intent and the execution of the acquirer’s order for due diligence. The selection, organization, and review of information for the business assessment would significantly minimize the time it takes to complete a potential list of due diligence demands. We are strong believers in the “Pre-Mortem” (Read a great article on this topic in the Harvard Business Review).
4. Use it to Broaden Your Understanding about the Potential Value of Your Business
Most of the time, business owners do not plan to sell their business until an issue or impactful event arises. It is vital to consider selling your business today, even if the timeline is 2 to 10 years from now.
By recognizing the benefit now, you will have the ability to spend additional time to raise the company’s value to reach a better sale price. Fully understanding the sale potential of the business often allows you to secure a better purchase price. A valuation expert can have a list of comparable purchases to strengthen your claim on the greater sale price.
5. Use it to Acquire More Accurate Valuation
The majority of business owners understand what their respective business is worth by analyzing market statistics. However, a certified business appraiser will be able to measure the business’s value reliably. Statistics can validate what you have learned based on market data. However, a business valuation extends further than that and offers additional details to benefit your business.
Having your company’s valuation information available increases your credibility, the buyer’s confidence in the proceeding, and the momentum for a successful exit. Taking too long to put it all together causes anger, doubts, frustration, re-negotiation, or a failed transaction. We recommend that you take this time to create a backup (hard and electronic copy) of all this material and keep it up-to-date and organized in a readily accessible and protected file.