Business Valuation

Business Valuation

Knowing the value of your business is critical if you are doing the planning necessary to exit the business successfully. Frequently, a business comprises between 65 and 90 percent of an owner’s assets. Accomplishing your financial goals will most likely depend on converting that asset into cash.

Unlike sellers of publicly traded stock, you have no readily available market to which you can sell your business. Every investor will place a unique value on your company; consequently, when you are ready to sell your business, it is important to evaluate the entire universe of potential buyers. Diverse types of buyers appreciate and are willing to pay for different aspects of your business.

Business valuation is important not only for preparing for a sale, but also for numerous business and legal situations including: drafting buy-sell agreements between co-owners; buying or selling shares to employees; planning gifts to heirs; retiring and selling to other family members; providing adequate key person insurance coverage; and creating a basis for compensating key non-family management.

Business valuation is both a science and an art. It requires the careful consideration of many factors affecting a business including current industry performance, market position, competition, economic conditions and overall financial performance. It also requires an understanding of the market and how various types of buyers value a business based on their ROI needs and expectations. Zamia Group evaluates all these variables and provides a valuation reflective of the business and current market considerations.