I’ve worked in valuations for decades. Many have asked me, why would you need a business valuation? For starters:
- Employee Stock Option Plans.
- Partial Business Buyout
- Financing or Investing
- Estate and Gift Tax
- Purchase Allocation
- Fairness Option
- Litigation Avoidance
- Life Insurance
- Shareholder Agreement
- Tax Considerations
- Buyer/Seller Agreements
You see that business valuation is needed for many business related items. Valuation can be a huge task and we know that.
A few Valuation Basics:
Maybe you are new to the business world or never needed a business valuation until now. Read on to learn the basics of what valuations are.
Valuation is a simple term to define; it is the process of estimating what something is worth. This could refer to you personally, your business, or even a patent.
Business valuation is a process and a set of procedures used to estimate the economic value of an owner’s interest in a business. Business valuation is used by financial market participants to determine the price they are willing to pay or receive to perfect a sale of a business.
In finance, valuation analysis is required for many reasons including tax assessment, wills and estates, divorce settlements, business analysis, and basic bookkeeping and accounting. Since the value of all things will fluctuate over time, valuations are as of a specific date. Valuations do not last forever; you will need to get them whenever a big event comes up. Remember value always changes.
There are many reasons why someone would need a valuation done. Maybe you are selling your business. When you sell a valuation will need to take place to determine how much your company is actually worth.
If your company is getting to the stage where you want to buy out a company or maybe complete a merger. You will need a valuation for that.
Personally, you will probably purchase life insurance someday or maybe that time is now. You will need a valuation to determine how much you are actually worth.
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Learn more about Business Valuation Principles by Dale S Richards http://a.co/cVsYyNNhttp://successbiznow.com/books/business-valuation-principles-by-dale-richards/