Small Business Value

Small business value is a controversial subject. There is a portion of the academic valuation population who believe there is a big difference between price and value. That is, the price a business may sell for is not necessarily its true value. They argue the value should be determined by proven academic theory and calculation, not on what price similar businesses to the one being placed on the market have been sold for.

Others argue that the price fetched is a “real” value” and that the market knows best!

The courts are flexible on this matter, but certainly, it is hard to argue against comparable sales evidence of similar-sized, similar-location businesses which have recently sold in a similar economic environment being relevant to the value one might place on a business about to go on the market.

If you are in a family court dispute you may need a business valuer to prepare a business valuation report and the small business value they will apply will take into account all the above-mentioned issues relating to small business value.

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The contents do not constitute legal advice, are not intended to be a substitute for legal advice, and should not be relied upon as such for any purposes. You should seek legal advice or other professional advice in relation to any particular matters you or your organisation may have.