For many small business owners, the value of their company is often based on their own belief or a quick calculation from a cheap or even free, unsupportable source. While this approach may seem easy, it often leads to inaccurate conclusions that can cost an owner money, opportunities, and credibility. A certified business valuation, performed by a qualified appraiser, provides clarity, accuracy, and peace of mind, while taking the guesswork out of the equation.
A small difference can have a significant impact when appraising your business. Over or underestimating value can create concerns with lenders and potential buyers, as well as internal tax and accounting requirements. Certified valuation professionals utilize proven methodologies under the income, market, and asset approaches, which take into account appropriate financial, market, and industry data.
Business owners often face critical decisions regarding the future of their company. Whether it pertains to selling, bringing on investors, securing financing, planning for succession, or resolving disputes, a fair and realistic value assessment should be a top priority. All these potential events require a defensible number, not a guess. A certified valuation provides the credible documentation that stakeholders, banks, courts, and potential buyers trust.
Owners often tend to rely on “rules of thumb” or anecdotal comparisons that do not account for the specifics of their business. This oversimplification can lead to undervaluing strengths or overlooking risks. A certified appraiser considers all factors that may impact value to create a complete, unbiased picture.
While a certified valuation comes with a cost, it often saves or earns business owners much more over time. By knowing the true value of your business, you can negotiate effectively, plan strategically, and avoid costly mistakes that arise from guessing.
In summary, a certified valuation is not just another report, but a tool that empowers small business owners to protect their hard work, maximize opportunities, and move forward with confidence. Guessing the value of your business is risky; knowing it with certainty is powerful.
Take the extra time and effort and reach out to a valuation professional today who can provide additional insight into the importance of obtaining a certified business appraisal.