|
Every smart business person knows the importance of being able to present a fair and accurate accounting of a businesses' value. It is particularly important when attempting to sell a business.
This valuation document is the single most useful piece of financial information about any business.
A valuation has many purposes and can be used to:
 |
Prove the Fair Market Value of your business |
 |
Provide Information to lending institutions for a business loan |
 |
Validate information for a Merger, Acquisition or Stock Offering |
 |
Create a succession plan or a trust |
 |
Develop an estate plan or tax plan to protect wealth |
 |
To determine the value of assets and liabilities |
 |
For the creation of an Employee Stock Ownership Plan (ESOP)
|
|
To know why it's so important to have a valuation you must understand that the book value reflected on the financial statements of a business usually differs vastly from its true market
value.
Without a new valuation, a business owner must be prepared to defend his opinion of value. For instance, any potential buyer will place little credibility in a value arrived at by an owner’s
accountant. Therefore, a properly prepared valuation report by a valuation expert would become the best tool usable to obtain maximum selling price.
When you work with a VR Intermediary to create a valuation report, the goal is a simple one: the creation of an accurate and comprehensive document that will stand up to scrutiny.
For larger businesses, VR has established relationships in place with accredited firms whose valuations are accepted by 95% of all SBA lenders in the country. Using third party valuations
make purchase price a small part of negotiations and put the emphasis on agreements to other terms & conditions of the transaction. VR sells 86% of all businesses that agree to a third
party independent valuation.
|