BENEFITS OF A THIRD-PARTY BUSINESS VALUATION

January 30, 2009

Business owners thinking of selling often disregard the value of a third-party business valuation. In today’s economy, it is often thought of as an expense that is just not required prior to sale. I can say with much certainty a third-party business valuation always pays for itself, often times many times over. Let’s look at why a business valuation is worth the price:

1. Often times, the broker will deduct the cost of the valuation upon closing, i.e., it is free to the business owner.

2. The business owner will have greater comfort in the listing price.

3. Greater understanding of the business owner of the tangible assets and the intangible assets

4. Buyers will recognize the business is not overpriced attracting more buyers.

5. Sets expectations on buyer financing alternatives for the business owner.

6. The business owner will have greater confidence in negotiating the selling price for the business.

Business valuations can be used for many additional purposes as well:

1. Discussions with minority owners, lenders, business advisors and family members.

2. Developing exit strategies and/or retirement plans.

3. Required by the IRS to change tax status, execute employee stock option plans and estate.

The decision to use a third-party Business Valuation is always made by the business owner or other appointed responsible person, such as trust officers, with consultation and advise from the business owner’s tax advisors, attorneys or other professionals. Call or email me at 800-599-0503 or eric@bluechipbizsolutions.com and let me help you with selecting a third-party valuation source.