Most people take it for granted that a business is a successful one. This is usually true but not always. This may be good enough for you, but it will not be for a potential investor. Publicly traded companies have to demonstrate the true value of the business on a regular basis for the benefit of their stockholders.
Few people who own small businesses in Sydney bother to find out exactly what it is worth. As a result, they only have a vague idea of how much they can make if they sell it, or how much it is worth when they go looking for an investor. Business valuation is important knowledge for many reasons, and the best way to get this is to look for business valuers.
Scolari Comerford explains what it is, and why it is important for SMEs.
What is Business Valuation?
Business valuation is an assessment of the true worth of a company or enterprise. The role of a business valuer is to gather all the documents of a company. This includes financial statements, management, operations, and earning capacity.
At the end of the day, the company such as an accounting firm that handles business valuations, or a certified public accountant, will give a business valuation certification.
Why do You Need One?
You can use a properly certified business valuation for many things. One is for taxes. You can also use to make sound financial decisions. For instance, if you are thinking of selling the business or getting a loan, the buyer or lender will ask for that.
Properly Estimating a Value
A proper business valuation will cost money. Additionally, you will have to collect many documents. Many business owners do not think it is worth the trouble and expense. A business owner can make a rough estimate of what the business is worth just to get an idea, but you cannot use it for any business transaction.
For many purposes, such as for making an estate plan or selling your business in part or in whole, you will need a business valuer to estimate your company’s worth.