Have VR Appraise Your Business Periodically

If you’re a business owner, do you know how much your business is worth? If you don’t, you’re not alone. The majority of small business owners in today’s market do not know the value of their business. Additionally, there are fewer who have exit strategies in place.

Most people have an annual physical checkup to monitor their health; receive a monthly or quarterly review of their financial portfolio to see what needs to be changed. Having your business appraised and periodically updated should be no different. If you had your business valuated years ago, it’s time to update.

Planning for the Future
A business valuation isn’t only used for when you’re selling your business. It’s also to improve your business, and plan for the future – retirement, new endeavors, etc.

VR will help you properly valuate your business, and prepare an exit strategy. No one is ever too busy to do something now; especially when it comes to something you’ve invested time and money. If you’re heavily invested in your business, you owe it to yourself to have valued representation in make sure your interests are met.

Here are some main reasons why you should have your business valuated:

• Transferring ownership to other members of your family on a tax-deferred basis;
• Resolving an exit strategy with a partner;
• Implementing incentives for employees besides promotions and bonuses;
• Determining a fair market price for selling the business;
• Examining the possibility of a minority investor such as a venture capitalist.

The Internal Reasons
Why you should really have a business valuation is to discover what initiatives need to be taken in order to improve your infrastructure and prepare for a visit from a prospective buyer.

More importantly, you should be aware of what your business is worth compared to your competition. Each VR business intermediary will be able to do an industry report detailing other similar businesses, and help explain why some maintain a higher multiple of earnings than others.

This analysis should include:

• Growth rate;
• Profit margins;
• Sales per employee;
• Return on investment; and
• Overhead allocation.

In addition to the financial analysis, there are other areas that will need to be evaluated such as:

• Brand equity;
• Long-term contracts with vendors;
• Customer base;
• Partnerships;
• Intellectual property;
• Trained employees;
• Patented products and copyrights;
• Risk factors such as seasonal products.

At VR Business Sales, we will help uncover the areas of your business that have been overlooked to make it stronger and run more effectively; both financially and non-financially. For example, we will be able to determine if you should be focusing your customer concentration elsewhere or whether you need additional management.

Through the business valuation, you will be able to improve and correct on the required areas, helping you increase the value of your business.

Complete the Sellability Score questionnaire today and we’ll send you a 27-page custom report complete with your score on the eight key drivers of Sellability. Take the test now: