Valuing a Company

Valuing a Company

Do you know the value of your company?  Studies indicate that 65 percent of business owners do not know the true value of their company, yet on average, this represents 75 percent of the business owner’s personal wealth.

While knowing the value of your company might not seem essential to day-to-day operations, it can provide you with significant insight into how the value of your company relates to your overall investment strategy.

Typically valuations are performed for one of three primary reasons:

  1. Taxation
  2. Transactions
  3. Disputes

However, given the size of a closely held business to an owner’s overall personal wealth, we suggest adding a fourth reason: planning.  Done right, a valuation performed for planning purposes will enable the company and the business owner to benefit from the following:

  • Knowing the elements of the company that will drive its value to a potential buyer (Value Drivers)
  • Monitor the progress of the Value Drivers to maximize value
  • Tie the value of the business into an overall personal financial plan
  • Understand “Your Number”, the amount required to maintain your lifestyle in retirement and how and when your company will enable you to achieve it

At BiggsKofford, we have access to a wide array of resources that provide us with current market trends and specific industry data, which enable us to perform in-house research.

If you would like to discuss business valuations in more detail, please contact us to discuss how we can provide you with a customized valuation that would most suit your needs.

Helpful links:

Alliance of Mergers & Acquisition Advisors
BiggsKofford’s Blog