As a business owner, it is vital to the strength of your business to assess if your business is moving forward or not and knowing its true value is key to planning a positive future for your business but also for you personally.
It is important to have an official comparison between the price you paid for your business and the current value of it. Once you have your valuation, you can then work on a profit improvement plan.
7 Reasons Why You Need A Business Valuation
- You are looking at bringing on a new business partner; Value the business properly to avoid future conflict (the same applies if an existing business partner exits the business)
- You need to insure your business for what it is really worth – surely you don’t want to overpay on insurance!
- You are divorcing and need to know how much your assets are worth, thus how much each partner should get from the business
- You need to assess if you are going forward or not; Compare the price you paid for your business and the current value of it today
- You need to prepare an exit plan and make sure that you can retire or move on with sufficient resources; Find out how much work actually needs to be completed before you reach your goal/desired sell price
- You don’t want to sell your business for less than it is really worth
- You are just curious after all!
How you benefit from having an expert Advisor complete your Business Valuation
You could do the valuation yourself, but:
- There are many different valuation methodologies; Unfortunately, you aren’t necessarily going to know which one is the most appropriate for your industry or business type
- You are not a financial analyst or business valuer; You aren’t necessarily going to know what the proper calculation steps are and you might not have the experience required
- Your opinion of your business can be very subjective
- You can’t go to court with your own valuation as it does not follow Australian Accounting Standards – APES 225; And you will have no validity in front of a Court of Law
- You could face legal action at some point; If you sell/buy to/from somebody and the person finds out the valuation was not a proper one (business partner, divorce, new buyer or former business owner)
- You could overpay for insurance yearly if the calculations are not properly done
If you are interested in finding out more, we are Business Valuation experts and can provide an APES 225 compliant valuation at a pre-agreed fixed cost.
Director – Business Improvement
P: +618 6315 2700
The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.
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