A business valuation report or appraisal report is an important part of running a business and can be indispensable in key situations. Valuation is a process used to estimate the economic value of a business and its tangible and intangible assets. In addition to estimating the selling price of a business, the same valuation tools are often used to resolve disputes related to estate and gift taxation, divorce litigation, establish a formula for estimating the value of partners' ownership interest for buy-sell agreements, and many other purposes.
When a business owner is considering selling a business, having a valuation and appraisal performed provides a better understanding of the realistic value of the company and validates if selling the company will provide for the necessary funds to achieve the financial goals.
A business valuation provides a business owner with an accurate tool that allows the owner to make an informed decision about the viability and timing of the transitioning of their business. An additional benefit of a professional business valuation is that even if you determine that it is not the right time to sell your business, it will provide you with a road map of what you need to do to increase the value of your business for a future transition.