Find out why you need to know what your business is worth.
1 Closing gaps
About 75% of owners who sell profoundly regret it. No doubt, many of them took what they could get because by the time of the negotiations, insufficient preparation was apparent. Knowing the value of your business nice and early enables an owner to make timely course corrects.
2 Value defence
A properly prepared valuation alone can be useful in shoring up a price in negotiations.
3 Coordination
A valuation can provide a baseline number for an owner’s advisor team to work from. There are tax, financial, estate and insurance implications (among others) to consider. A valuation has a harmonizing and organizing effect.
4 Establishing target valuation
There’s a saying in the exit planning community that you should actually use the value of business, much the same way you would any other KPI, something to actively monitor and guide your business by.
For many owners, the business is the single largest asset in their portfolio. Why wouldn’t you monitor its value in much the same way you would a stock or real estate portfolio?
5 Choosing the right exit strategy
There’s actually a number of ways an owner can exit, they might have more options than they think. A valuation is a great way to start a robust strategy selection process.
6 Maximising value
Valuation is not fixed. Knowing what a business is worth today enables an owner to also calculate what it could be worth. If the right things are paid attention to, it can be deliberately, predictably grown over time.
