Business Valuation: What is Your Company Worth?
What is your business worth? And, if you’re not planning to sell in the near
future – why do you need to know?
Many business advisors say there are many good reasons to know the value of your business.
- Knowing whether the sale of your business can fund your retirement
- Making sure you have the right amount of insurance
- Helping to make a case when raising capital
- Determining an amount for a buy-sell agreement, in which the value of an owner’s or partner’s share is purchased by the other owner or owners to provide orderly transition following a death
- Aiding in tax strategy, wealth preservation and estate planning
- Informing strategic business decisions and exit strategy
Business valuation is part art and part science, and can be heavily dependent on timing and other circumstances. There are a lot of valuation methods commonly used by professionals and third party buyers, and deciding which method makes the most sense for your business is not easy.
A trusted advisor can guide you through the process and help you decide what steps to take based on what is important to you.
As a starting point, think about the ongoing and transferable value of your business. If the main value of your business walks out the door when you do, a buyer may not pay what you want or need for retirement. There may be options to increase that ongoing and transferable value between now and when you plan on exiting the business.
For more information, we suggest you start with your financial advisor to discuss any goals related to the value of your business.
* This is for informational purposes only. Mutual of Omaha and its Representatives do not provide tax or legal advice. You should speak to your tax and legal advisor before making any financial decisions. Registered Representatives offer securities and Investment Advisor Representatives offer advisory services through Mutual of Omaha Investor Services, Inc. Member FINRA/SIPC.