Experienced Small Business Accountant - If you're conscientious about financial
reporting, you may already have a sense of your company's worth, but in some
instances, you might need a formal business valuation, such as:
Certain
transactions: Are you selling your business? Planning an IPO? Need financing?
Tax
purposes: This includes estate planning, stock option distribution, and S
Corporation conversions.
Litigation:
Often needed in cases like bankruptcy, divorce, and damage determinations.
There
isn't a single formula for valuing a business, but there are generally accepted
measures that will give you a valid assessment of your company's worth. Here
are three tips that you can use to give your business a more accurate
valuation.
1.
Take a close look at how your business operates. Does it incorporate the most
tax-efficient structure? Have sales been lagging or are you selling most of
your merchandise to only a few customers? If so, then consider jump-starting
your sales effort by bringing in an experienced consultant who can help.
Do
you have several products that are not selling well? Maybe it's time to remove
them from your inventory. Redesign your catalog to give it a fresh new look and
make a point of discussing any new and exciting product lines with your
existing customer base.
It
might also be time to give your physical properties a spring cleaning. Even
minor upgrades such as a new coat of paint will increase your business
valuation.
2.
Tangible and intangible assets. Keep in mind that business valuation is not
just an exercise in numbers where you subtract your liabilities from your
assets, it's also based on the value of your intangible assets.
It's
easy to figure out the numbers for the value of your real estate and fixtures,
but what is your intellectual property worth? Do you hold any patents or
trademarks? And what about your business relationships or the reputation you've
established with existing clients and in the community? Don't forget about key
long-term employees whose in-depth knowledge about your business also adds
value to its net worth.
3.
Choose your appraisal team carefully. Don't try to do it yourself by turning to
the Internet or reading a few books. You may eventually need to bring in
experts like a business broker and an attorney, but your first step should be
to contact us. We have the expertise you need to arrive at a fair valuation of
your business.
If
you need a business valuation for whatever reason, please don't hesitate to
call and speak to a tax and accounting professional who can help.
Amare Berhie, Senior Accountant
(651) 300-4777
No comments:
Post a Comment