All business owners need to consider a business valuation, ideally updated annually. A current business valuation is important for your company’s financial health as it can:
|•||Give you an accurate picture of what your company is really worth — and how transferable that value can be — this provides a realistic picture of your company’s value should you decide to sell. It also provides a window into your ability to grow the business and how much money a bank would be willing to lend to support that growth.|
|•||Help you to plan for a faster sale — proper planning delivers more lucrative and successful sales of small businesses, as it gives a business owner time to increase the company’s worth before the sale, and to sell quickly.|
Protect your family if something happens to you. John Warrillow, founder of The Value Builder System, writes that illness is the number one event that forces business owners to sell. A business valuation analysis can identify ways to create a more transferrable business in the event of illness or death.
Overall, a business valuation professional can provide you with an exact value of your company and help you develop a long-term plan to increase its value. Valuation strategies can help you increase profitability by helping you:
|•||Identify prospective opportunities for sales growth|
|•||Implement cost-cutting strategies that maximize profits|
|•||Increase employee retention and save money on hiring and training|
|•||Develop systems and processes to increase the odds of a successful transition to the new owners, whoever they may be|
If you or your client is interested in increasing a company’s value, please contact Seth Webber.