September 18, 2015

What’s the Value of Your Business? It’s a Perfect Time to Find Out.

by: Lawrence A. DeBaltzo, CPA, CGMA, CVADeBaltzo_Lawrence

As a business owner, your time is spent trying to build up your business, keep your customers happy, fend off competitors, and pay your employees. You know you’re adding value to your organization by making these investments, but do you have any idea how much? Do you ever wonder what your business is actually worth?  While it is a question you should ask yourself, you don’t have to wonder.  We can help you find the answer.

While many services provided by Hobe & Lucas help you to run your business, business valuation services help you understand the value of your business in the marketplace so that you can make smart decisions. You may simply be curious to know the value, and that is certainly fine. Also, there are a number of very practical reasons it can be important to know your company’s value.

How could you benefit by having a better grasp on your business valuation? Consider the following questions as thought starters:

  •      Is there a chance you might ever sell your business? – Both the buyer and seller will likely want to know the value of a business in order to have a starting price point for negotiations.
  •      Might you ever gift partnership interests or corporate shares of your business? – When making taxable gifts, it is a great idea having a valuation to use for Internal Revenue Service purposes.  The value used on your gift tax return is then based on widely accepted valuation techniques.
  •      Will you be doing any estate planning? – Gifting is an essential part of any estate plan, but since gifting can only occur during our lifetimes, establishing values for the closely-held businesses that are held in the estates of business owners is also important—especially if an estate will be large enough to require the preparation of Federal estate tax returns.
  •      Do you have a succession and/or exit plan? – As a business owner, you have built up your business and now you are looking toward retirement.  You may want to shift your business to the next generation or to a group of skilled managers. By establishing a value for your business, you will be prepared to discuss and negotiate your exit from the business.
  •      Are you prepared for shareholder or partner disputes? – Shareholders and partners don’t always see eye to eye, unfortunately.  These disagreements may turn into disputes that may require litigation.  Valuation services may be employed to help resolve these issues by determining the value of an interest for a potential payout to an exiting shareholder or partner.
  •      Have you considered repercussions of marital disputes? – Marriages may be made in Heaven, but divorces surely come from elsewhere.  While not a pleasant thought, valuation services may be employed here to help resolve disputes over marital business assets.

As you can likely see, business valuations serve many purposes, and there’s never a better time to start investigating it than now. A Certified Valuation Analyst can help, delivering an appropriate report based on your specific needs and circumstances. The training required to be certified in this field may be rigorous, but navigating the process of arriving at a conclusion or calculation of value doesn’t have to be.

Need to know the value of your business? Call us at 216.524.8900 for a free consultation or fill out the contact form below and we will be happy to work with you to discover that value.

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Hobe & Lucas Certified Public Accountants, Inc. is a full-service accounting and business consulting firm dedicated to providing clients with exceptional value.

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