GROWTH FINANCING? - WHY OWNERS SHOULD GET A BUSINESS VALUATION.

An independent valuation can be a starting point for long-term strategic planning and objective reality check

Whether your business is a start-up, established, and in growth mode, or has reached prime, it is important to understand its enterprise value. An independent business valuation can serve as a starting point for long-term strategic planning, or a much-needed objective reality check for owners with unchallenged expectations about the value of their business.

A business valuation conducted by a professional third-party who inspects and analyzes the market, industry, entire business, including assets, depreciation, and other internal and external factors. From there, applies certain methodologies, depending on the industry and circumstances, to arrive at a reasonable opinion of value.

Ideally, more than one valuation methodology will be applied by your independent advisors. This way, all stakeholders can get a clearer picture of how the business is valued over time.

REASONS WHY YOU WOULD NEED TO KNOW WHAT YOUR BUSINESS IS WORTH:

GROWTH FINANCING.

Whether you need to buy new equipment, remodel, or meet payroll, you want to be fully prepared for obtaining financing. Presenting the lender with a professional business valuation, including detailed financials, will help streamline the process.

SELLING A BUSINESS.

A professional valuation is necessary to give you a clear, objective assessment of your business's market value based on its current condition. It will help you set a realistic asking price, give you more confidence during negotiations, and give the buyer more confidence in making the purchase. It may also be used by lenders for financing.

TRANSITION PLANNING.

Every person will exit their business. A business valuation will help you plan your future. It will give you a baseline assessment of your assets and the current condition of your business. It will reveal any gaps between what you currently have and what you need. It will help you choose the best option and create a plan to meet your goals.

STRATEGIC PLANNING.

A business valuation will uncover opportunities where your business can grow revenue, for example adding products or markets. It can help you identify areas where you can reduce or eliminate costs, identify gaps, to operate more efficiently and effectively.

ATTRACTING EQUITY INVESTMENT.

It is not unusual for a successful Startup or an established business to grab the attention of private equity funds, family offices, high net worth individuals, angel Investors, funds, or venture funds. A recent business valuation can offer a complete snapshot of the business, its financial health, structure, and future growth and earning potential.

VALUE PROTECTION.

To get your business properly insured, a detailed business valuation can help you determine the amount of coverage you need. Your business valuation could influence payouts for a co-owner life insurance agreement, as well as payouts for natural disasters.

DIVORCE.

During a divorce, the distribution of assets and liabilities, anything spouses buy, build, or acquire during the marriage, may also include a business. A professional, unbiased business valuation will help both you and the court make an informed decision.

BUYING OUT A PARTNER.

It is common for one business owner to decide he or she wants to divest ownership. the remaining partner and or shareholders retain a professional to determine the value for a buy-out of the ownership interest.

MANAGEMENT BUY OUT

It is common for older generation of ownership to decide he or she wants to divest ownership, the remaining management team will retain a professional to determine a value for a buy-out of the older generation.

ESTATE PLANNING.

If something happened to you, do you have a plan in place to protect the future of the company? Would you choose a family member to run the business, or would you prefer to leave it to your partner or a key employee? A recent business valuation with up-to-date financial records would help this person get your estate in order.

SUMMARY

Just like your personal health and wellness risks and opportunities., you also need to be vigilant and initiative-taking with the protection and growth of your business. Understanding the risk to your business and the drivers of valuation guide your strategic planning and provide an independent third-party assessment at regular intervals, Protecting and growing the enterprise value of your business.

REQUEST OUR BUSINESS VALUATION GUIDE.

This free e-book we will explore:

Preparing for a valuation.
Valuation methodologies.
Valuing intangible assets.
Valuation mistakes to avoid.
Price and or value.
An exclusive offer to receive your confidential custom business valuation at our expense.

Request the Business Valuation Guide

Book an initial (no obligation) Consult

ABOUT THE SHAUGHNESSY GROUP

We founded the Shaughnessy Group in 2017 with the purpose to help business owners successfully transition out of their most valued asset, their privately held, lower middle-market company. Since our founding, our clients have asked us to aid them beyond the sale or divestiture of a division or business, to help them to grow through acquisition and source debt to fund their acquisitions. www.shaughnessy.group

ABOUT THE AUTHOR

Karl Sigerist is an advisor to shareholders, board members, owners, entrepreneurs, and executives; on governance, strategic and corporate finance issues through the business life cycle; buying, financing, and selling their business.

Founding member of 8 start-up organization within the public/private investor community and 3 turnarounds of Canadian and European private/public organizations.

Led the growth of business-to-business technology, specialty finance, warranty, and creditor insurance organizations through 3 mergers, 38 acquisitions, 34 strategic alliances $965MM of capital raises and 5 digital transformations into leading national brands and platforms.

Fostered cultures and teams that achieved Growth 500 status for five consecutive years and Top 100 Small & Medium Enterprise Employer honors for two consecutive years.

Mentor to business school students and newly immigrated Canadians on their personal and professional growth. Volunteer on not-for-profit boards. https://www.linkedin.com/in/karlsigeristjr/

Seeking the Latest Insights?

Subscribe to our newsletters, register for upcoming events, download free content from our library of resources below.