Help your Business Sell by Providing Buyers with the Valuation Answers

Help your Business Sell by Providing Buyers with the Valuation Answers

Valuation services may seem to be something you can do without when you get ready to sell your business. After all you have your balance sheets, bank accounts, and tax returns, those will show what your business is worth right? Well, that is not completely true. Those items do help but they also miss a lot of things that could raise the value of your business.

Do you have furnishings? Do you own the building the business is in? Is your business located in a great business area? What about your records, customer base, and other assets? There is often of more value in a business than simply the profit and loss statement. When you want to know how much your business is truly worth a business valuation can help you quantify all parts of a company’s value.

Once you know the value of your business you can list it with a reasonable asking price that will meet your profit needs as well as offer buyers a fully informed sales packet. Do not be surprised if potential buyers are interested in an independent valuation service as well as the valuation report you provide.

This is a common business practice and helps make sure that the potential buyer has all pertinent information. By providing a valuation report compiled by a professional you are showing potential buyers that you did not just randomly select a price and that you have invested in making sure that the value of your business is accurately reflected in the price.

When a potential buyer is presented with a sales packet rather than just a price they can see all aspects of the business, profit, loss, value, assets etc. This helps them make an informed decision and offer a bid to purchase the business. Without this information, they must do the research on their own. Help your business sell by providing potential buyers with the valuation answers to the questions they have early on to prevent confusion during the business transaction.

Dale Richards, Excel Manaement Systems, Inc. helps a client to understand valuation strategy for future sale. Dale helped Kyle Hanson to understand different strategies and timing for a potential sale. Kyle Hanson, Asphalt Materials gained needed insight to help him make a value-added decision on when and how to sell his company.

Importance of Valuations

Business owners who are interested in learning the true value of their companies will do well to hire professional independent valuation services to perform this task for their company. There are several reasons that this might be something valuable to a business, even if there is no intention of any kind to sell the business or to place it on the public market.

Credit can be based on value. A business that wants to move forward may require a line of credit. In fact, unless the business is built completely on ideas, such as the case of artists and writers, credit is almost a necessity. One way to obtain credit is by proving the value of the business may be able to guess at an approximate value, but independent business valuation services tend to be better versed in the details of a valuation. This idea is comparable to other businesses. For instance, plumbers become certified in plumbing and can be relied on to know all of the ins and outs of this trade. They do not sell electrical services because that is not the field they are an authority in each and every day.

Internal valuation’s are unreliable. When a value is placed on a business, it is always good to get an outside, professional opinion. This helps bankers decide that the risk may be worth it if the business is highly valuable. This is a pattern that can be repeated as the credit helps the business to grow and more credit is developed.

Businesses specialize for a reason. Successful businesses build their reputation on their success in specific areas. Business valuation services are no different.