REASONS YOU NEED A BUSINESS VALUATION
The ultimate need for having a business valuation is simple. To know your business’ worth!
Do you actually know your worth today? Keyword, today.
Perhaps you have gotten a business valuation done in the past. Maybe you’ve heard the old saying, “Yesterday is history, tomorrow is a mystery, today is a gift of God, which is why we call it the present.” Or better yet, the famous words of Mother Theresa, “Yesterday is gone. Tomorrow has not yet come. We have only today.”
Likewise, the future of your business is determined by what your business says today. Knowing this truth will help you plan and prepare you for the mystery that lies tomorrow.
Aside from knowing your accurate valuation, the following are additional reasons someone would need a business valuation.
TOP REASONS FOR A BUSINESS VALUATION
A business owner is 3-5 years away from selling
If you find yourself in the stage of your entrepreneurial journey to sell your business in 3-5 years, a business valuation will help you make sure you have a valuable business.
It is quite common that the majority of business owners do not know the true value of their company. It is also typical for a business owner to magnify their company’s worth, which, why not? It is YOUR business, after all.
Retirement Planning
For most business owners, selling a business after decades of building it up can be difficult to do, from both a practical and an emotional perspective.
However, when and if you plan to sell your business for retirement it is a great idea to set a baseline value for the business and develop a strategy to improve the profitability to increase the value as an exit strategy. A business valuation will help do just that!
Building a more valuable business
If you are a business owner who mentally has buckled the seatbelt and is in for the long haul, you may just want to make sure you are doing everything you can to build value in your company long term. That is the goal in starting a business, right?
To help create a roadmap, you will have to know the following information:
Your Industry
Your Company’s Revenue: the total amount of money your business receives for selling a good or service
Your Company’s Income: the amount of money your business ears before deducting income taxes
