Business valuations – In search of fair market value

Many business owners think that their business is worth more than it actually is. That is because a business’s value to a seller is more often than not the same value to a buyer. For one thing, there are several valuation methods that can be used and even choosing the correct method (or more likely, the correct combination of methods) to use in a given situation is more of an art than a science.

There are a number of instances when you may need to determine the market value of your business. Indeed, buying and selling a business is the most common reason. Estate planning, divorce settlements, determination of a buy-out price for a partner’s share or verification of your worth for lenders or investors are other reasons. To intentionally cultivate business value over time should be the focus of any business owner and an annual valuation can be used to measure the performance of the business.

Our November BAN Bulletin newsletter, written by our alliance partner and business valuations expert, Dr John Hendrikse, focuses on 14 considerations in achieving the goal of a fair market valuation for your business.

Valuing a company is scarcely a precise science and can vary depending on the type of business and the reason for coming up with a valuation. The process can be very complex and time-consuming, and takes quite a lot of experience to do well. Hopefully, you’ll take our advice and hire an expert business valuator to do this for you.

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