Valuing Your Business

Valuing your business is a complex task. What you want as a sale price for your business and what it is worth to the marketplace are two different outcomes in most cases. That is not to say that the value you place on your business is always higher than the market value, it is sometimes possible the owner does not fully appreciate what they have and a buyer may see something in the business that the business owner does not.

However, the critical issue is that valuing your business is an essential prerequisite to a successful sale outcome. It gives the buyer and their banker and accountant confidence and lowers your indemnity risk.

Of course, valuing your business is absolutely essential when you are admitting a new partner and is also vital when a divorce causes the family court to require an independent third-party report on the market value of the business. so who is best placed to produce an accurate and relevant business valuation?

It should be someone who has current and relevant sales evidence of comparable businesses which have recently sold in the same marketplace. It should be compiled by someone who is trained in business valuation theory and someone who, in valuing your business, is aware of the macro and micro pressures on the business from the competition, government policy, and worldwide economic forces.

Valuing your business is a task best undertaken by a business valuer, who is well-regarded by the business community and who is dedicated to the science of business valuation.

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Disclaimer

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.