Determining your business’s worth may not be as simple as it sounds. The overall value of a business includes a variety of factors and may be needed for many different reasons. Business valuation provides the answer to the question of what your business is worth. At Alliance Business Coaching, we offer a business value assessment to assist in valuing a business.
Why Valuation Matters
The value of your business matters simply for you, as a business owner, to understand the current state of your business’s financial situation. One of the main reasons to obtain a business valuation is when you are trying to determine if you want to sell your business. In order to establish how to price your business for sale, you must look at all the components of your business to determine its value.
Even if you aren’t selling your business, a valuation may be needed for other reasons. When a partnership is formed or dissolved, the value must be determined as percentage shares are set or paid.
Sometimes your personal life impacts your business, for example if a business owner gets divorced, the value of the business may be needed for the divorce settlement. Other reasons, may be obtaining insurance or funding. Regardless of the reason for seeking a business valuation, it’s critical to work with an expert to ensure you get the correct worth.
What’s Included in a Business Valuation?
The process for a business valuation starts with a deep dive into your financials. All components of your business are assessed, including inventory, property, equipment, stocks and anything else that adds actual value to the business. Any debts are also calculated to understand the financial responsibility of the business.
However, it isn’t just assets and liabilities that determine a business’s value. The earning potential, profits and client base are also considered when evaluating the total value of a business.
Is Your Business Viable Without You?
One question that must be considered when looking at the value of a business is whether or not you are your business’s greatest asset. This is critical if you’re seeking to sell your business. During the valuation process, the question of whether you have an actual sellable business is critical.
If your unique knowledge or skills are the primary source of income, then it could be difficult to sell the business. In this case, your valuation may be lower than you think. This is why getting a realistic and unbiased view of your business’s worth is important. In order to sell a business, the new owner will need to be able to build upon your success.
Business coaching or consulting is a great way to take your business from a job, where you are the primary asset, to an independent and sellable business. With the right strategies, processes and team in place, your business can grow and increase in value.
Work with a Business Valuation Specialist
The best way to really understand the value of your business is to seek the help of a business valuation specialist. Not only does a professional understand the correct method to determine an accurate value, they also provide an unbiased view.
At Alliance Business Coaching, we provide business valuation analysis to clients in Colorado with a focus on the Denver Metro and Front Range markets. Our business valuation services are presented as a stand-alone offer or in combination with our business coaching or consulting programs. Contact us today to schedule a consultation.