Give Yourself the Gift of a Valuation This Holiday Season?

As the year winds down, there’s a gift every business owner should consider—a current valuation of your business. Knowing the true value of your business is a gift that keeps on giving. Here’s why.

Estate Planning

One of the key benefits of a valuation is that it sets the groundwork for smart estate planning. If the unforeseen happens, knowing your business’s worth simplifies the inheritance process for your heirs and ensures they receive what you intended. It can also help prevent disputes and legal entanglements that can arise when valuation estimates are murky or outdated.

Exit Planning

Whether you’re ready to step back next year or in the next decade, a valuation helps solidify your exit plan. With an accurate understanding of your business’s worth, you’re empowered to plan the best timing for a sale or transfer, negotiate confidently, and minimize surprises.  Unfortunately, studies show most owners spend very little time planning how they will exit their business. The smaller the business, the less likely the owner is to plan ahead—most start preparing less than a year before selling. This rushed approach can lead to a lower sale price, lost leverage in negotiations, failed transactions, and missed opportunities to boost the business’s value before hitting the market.

Build a Stronger Business Next Year

Even if a sale isn’t on your immediate horizon, the insights gained from the valuation process can guide strategic decisions to increase your company’s value over time. Knowing what adds or detracts from your company’s worth can help you decide on investments, operational changes, and growth strategies.

This holiday season, consider giving yourself a gift of increased clarity, direction, potential liquidity and peace of mind in the new year.

To learn more, see our prior post on the Six Benefits of Monitoring Company Value.