Many of our clients are business owners and we often have conversations with them in and around the value of their business. It’s easy to pin a value number on a business based on emotion; after all if you have built a business from scratch or bought somebody else’s business and made it your own, it becomes your baby. Of course, family is worth more to you than anything on earth, but your business ends up coming in a close second. But your emotional value doesn’t have any bearing on the actual value, and when dealing with banks, insurance companies, and the various other people that help your business grow and operate, they often need a number based on a formula.
Sometimes it’s quite a surprise when we do have business evaluations, and find that it’s actually worth more than a business owner imagines. “Can’t see the forest through the trees.” Business owners are so busy operating and growing their business that they don’t realize what it’s really worth, or how big it has become.
Often though, business owners are unpleasantly surprised to learn that because of certain factors, a business is worth less, which causes a problem with financing, insurance, and other key issues. But when they find a business is worth less, they often receive information as to what changes would need to be made for it to increase in value.
So what’s our point? Well, we’re proud to announce that because of the partnerships with our national accountant offices and the new advances in “big data,” business evaluations are much easier and much less expensive to obtain than ever before. When businesses in the past looked to their accountants for a valuation, the answer was often a commitment of quite a bit of time answering a great deal of questions, which is hard for a business owner to give up, even harder to give up than their capital. Then they wait anywhere from eight to 16 weeks for the data to be compiled, and then the bill for all that time and effort could be $5,000, $6,000, or even $10,000, often resulting in a business owner that would really like to have an accurate evaluation being unable to do so.
Tax planners usually have partnerships with business valuation services that can do them in 7-10 days and for +/- $2,500, and if you’re nervous about how to plan for your business that you might want to sell, expand, or maybe even close, a business valuation is the starting line of all those activities.
