Many business leaders think they only need a business valuation if they’re looking to sell their business, but if you ask us we say it’s a good idea to have one handy at all times. In fact, if you want to cover all your bases, we recommend an annual business valuation.
Knowing what your business is worth can be extremely important in various situations (more to come on that later). But deciding to get one done and actually taking the steps to fulfill the process can seem unnecessary.
Here are some reasons why you should reconsider this and add an annual valuation to your company to-do list.
Why Get a Business Valuation?
There are a lot more reasons than just preparing to sell your business, for example:
1. Business Expansion
Are you looking to expand or construct new facilities?
A business valuation can help you secure financing and make the whole process more efficient and effortless as your bank has all the info they need to approve your loan.
2. Partner or Shareholders Exit
No matter the intricate details, splitting up from partners or shareholders can be an uncomfortable and stressful situation. Having an up-to-date valuation will make the division that much more smooth.
3. Your Business Has Experienced Disaster
Depending on where you are located, this could be a very real possibility; your business may suffer from a disaster like tornado, flooding, hurricane, etc. It’s much easier to have a benchmark to compare your business’ value before and after the event.
4. Merging with Another Company
Imagine an opportunity arises to merge with another company, but you need to make a swift decision. Having a recent valuation can help make the process run smoothly and ensure you don’t miss out on any great offers.
5. Familial Issues
Personal emergencies happen and it’s not often that people feel prepared. Save yourself trouble and stress in the event of divorce or other difficult situations by having an up-to-date valuation.
These five reasons just touch on the convenience of having an annual valuation. If you’re still not convinced, let’s talk! We’d love to walk you through the value and necessity and break down the benefits for you and your business.
When it comes to exactly how to put a value your business, there’s an exhaustive list with various methods. But as we learn more about your company and your goals, the Saddock team will be able to guide you to the best fit for your organization.
Some common business valuation methods include:
- Replacement value
- Breakup value
- Asset-based valuation
- Market capitalization
- Earnings multiplier
Saddock Is Here to Support You
We know that all of this info can be a little overwhelming, especially if you’re not used to dealing with it day in and day out, but that’s why we’re here! We want to help you develop the best strategy for your business goals.