According to the American Society of Appraisers, many chief executives and company presidents simply don’t know what their own company is worth and, as a result, they are making corporate decisions from an unenviable position.So, the society is now offering specific tips to understand why every company needs to have a current business valuation.
1. Know what your company is actually worth. In this respect, the society feels that a goodly number of business owners don’t really have a clue as to the worth of their businesses and that whenever they think they know, it’s usually incorrect. For that reason, the society suggests an independent, professional business valuator.2. Understand where your company fits. A business valuation generally researches and provides a detailed explanation of your specific industry and puts your company somewhere in that competitive landscape of a particular market. At the same time, the valuation will let you know the market price of publicly trade companies in your same line of work.
3. Learn the financial condition of your company. Again, many owners of companies believe they know it all about the financial health of their own company. The problem is that by having an independent review and analysis, the owner will then be able to back up that belief.
4. Make fast decisions on buying, selling, and mergers. The society says that when you are faced with an option to buy, sell, or attract capital for the business, many times you simply don’t wait to have a business valuation. This is the reason for having a business valuation completed and on hand.
5. Stay current. It’s no secret that the market fluctuates quite bit. So, it is vitally important to have business valuations because the business climate is perpetually changing.
Keep in mind that there are many reasons to get something appraised. In fact, anything can be appraised: houses, boats, cars, antiques, and businesses. Many of us also get appraisals for insurance, estate, and financial and disaster planning purposes. A written appraisal completed by an accredited appraiser can be used with the Internal Revenue Service and in court as proof of value.Incidentally, the society suggests that you hire an appraiser who works in the specialty needed. Actually, the society certifies appraisers in six disciplines: gems and jewelry, business valuation, personal property, machinery and technical specialties, real property, and appraisal review and management.
To find a business valuation expert or to learn more about business appraisals, you can log onto www.appraisers.org/consumer.
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