Businesses Evaluations: When to Get Them

A business evaluation gives you an accurate picture of what your business is worth, and is vital anytime you want to make a change. Here is when and why you should get your business evaluated.

Selling

It’s a good idea to know how much your business is worth before you sell it. An evaluation can help you determine a fair price for it. Having an evaluation is also a good negotiation tactic as you can show potential buyers what it is worth.

Buying/Expanding

Expanding your business is always a good sign, as is buying other ones. To help secure loans it’s a good idea to get an evaluation done before you proceed with expansion. For buying another business it is a smart idea to get an independent evaluation done to determine what it’s worth if the sellers have not.

Reorganization

Every business, no matter how big or small, goes through a reorganization at times. Whether that’s adding shareholders or new partners you might consider getting a valuation done. It’s useful to know how much your business is worth so that you can determine how much percentage investors, partners, and shareholders should get.

Estate Planning

No one ever wants to think about their life after they’re gone but estate planning and creating a will is important. As a business owner, you have to determine what will happen to your business when you pass. A valuation is important to determine the worth, especially if you are dividing it among multiple people.

Matrimonial Separation

Marriage doesn’t always last forever, unfortunately. During a matrimonial separation, all assets are discussed, including your business. An evaluation should be done to determine how much it is worth. You might share the business or you can retain it all and give your ex-spouse something else of equal value in exchange.

Conclusion

Having a fair evaluation of your business and knowing it’s worth is never a bad thing. It can be useful in a variety of situations. Contact a Toronto Chartered Accountant today if you would like to set up a business evaluation.