A business valuation is a valuable piece of information for a business owner to have. Oftentimes a business’ monetary value is over or under-estimated by the legal owner(s) which can result in profit loss.
Business valuation is a process and a set of procedures used to estimate the economic value of an owner's interest in a business. Valuation is used by financial market participants to determine the price they are willing to pay or receive to effect a sale of a business.
For the owner of a business to truly know what his or her business is worth from an economic standpoint, a third-party business valuation is the best practice.
For business owners, proper business valuation enables you to know the worth of your shares and be ready when you want to sell them. Just like during the sale of the business, you ought to ensure no money is left on the table and that you get good value from your share.
If a business is faced with a lawsuit, the court will require a business valuation so that the monetary worth of a business is transparent during litigation. We at Mays & Associates are experienced in business valuations in general and when needed for litigation.
How do we determine a business valuation?
A business valuation includes a variety of data and analysis of the data. Business valuations are not all numbers. An evaluation of the business’ structure, management team, and operations are all factors we take into consideration along with an estimation of potential future earnings, current debts and value of assets. The IRS requires that a business is valued based on its fair market value.