Why get a business valuation during a divorce?
Why should business owners get an independent business valuation?
An independent valuation can be a starting point for long-term strategic planning and an objective reality check. Whether your business is a start-up, established and growing, or at its prime, it is important to understand its enterprise value. A professional third party inspects and analyzes the market, industry and the entire business — including assets, depreciation and other internal and external factors — then applies appropriate methodologies to reach a reasonable opinion of value. Ideally, more than one methodology is applied so all stakeholders see a clearer picture over time.
Why would you need to know what your business is worth?
- Divorce — a business built or acquired during the marriage may be part of asset division; an unbiased valuation helps you and the court make an informed decision
- Selling a business — an objective market value sets a realistic asking price, builds confidence in negotiations and supports lender financing
- Transition planning — a baseline assessment reveals gaps between what you have and what you need to meet your goals
- Strategic planning — uncovers opportunities to grow revenue and reduce costs to operate more efficiently
- Attracting equity investment — a complete snapshot of financial health and growth potential for private equity, family offices, angels and venture funds
- Growth financing — detailed financials streamline approval for equipment, remodelling or payroll needs
- Value protection — helps size insurance coverage and can influence co-owner life insurance and disaster payouts
- Buying out a partner — determines a fair value for an exiting owner's interest
- Management buyout — values an older generation's stake for the management team to acquire
- Estate planning — up-to-date records help whoever takes over keep your estate in order
Key facts: why owners get an independent valuation
An independent valuation supports strategic planning and provides an objective reality check
A professional applies more than one methodology for a clearer picture over time
Triggers: divorce, sale, transition, strategic planning, raising equity, financing, insurance, partner or management buyout, estate planning
Regular third-party assessments help protect and grow enterprise value
Disclaimer: This article is for general informational purposes only and does not constitute legal, tax or financial advice. Consult qualified advisors regarding your specific circumstances.
