• Do you know, right now, the real value of your business?

• If you don't, you may be short-changing your legacy and your family.

While no one can predict the future, as a business owner, you have an obligation to your team to put your business in a position to best take on whatever challenges the future brings and knowing the real value of your business is a start.

Not only is a Business Valuation a critical tool for today's business owner, having a Business Valuation that meets current IRS and banking requirements is essential. Having your Business Valuation performed by an Accredited Business Valuator (ABV) will assure you that your Valuation will withstand IRS and banking scrutiny. Having a Business Valuation done by Esus Management Consultants will assure you that your Valuation will be performed by an ABV.

Business Valuations are critically important for:

• Day-To-Day business decision-making - Knowing the factors that drive your business value will make you think differently about critical decisions you have to make, day in and day out (e.g. if you know a particular decision can help you right now, but may not be the best decision for continuing to increase the value of your business, you may think twice about taking the short-term solution).

• Gaining Bank Funding (line of credit, loan consolidation, commercial building loan, etc.) - With funding tighter than ever and funding sources limiting funding to only those businesses that appear to be on the soundest footing, knowing the real value of your business and being able to support that value with a valuation from an ABV will go a long way in convincing funding sources that you and your business are a good risk.

• Strategic Planning – Knowing the factors that drive your business’ value will help a business owner determine what value they want their business to have at a particular point in the future, and then work with those value driving factors to develop a plan that will have the greatest chance of success. Not knowing the value now, will make any future target a mirage.

• Estate Tax Planning - No one wants to pay more taxes than required. Knowing the real value of your business will allow you to know what your tax base is and help you determine the best approach for minimizing the tax burden should something happen to you and your estate has to sell your business.

• Implementing performance-based compensation programs - Many business owners we work with want to begin paying bonuses based on performance, performance that drives the value of the business up. Knowing the value factors that do just that allows the owner to place the bonus emphasis on those factors, thus improving the chance of the team focusing on the important issues and not on those issues that have little to no impact on the business value.

There are other reasons why knowing the real value of your business is important such as:

• Providing the appropriate key man insurance coverage.

• Planning a gifting program to heirs

• Planning to sell off the business

• Divorce / Litigation

• Liquidation or Reorganization

• Developing buy/sell agreements with employees or family

• Employee Stock Ownership Plans

But the most important reason, perhaps for any owner, is in the Development of an Exit Strategy.

At some point, a business owner is likely to decide it is time to get out of the business and use the funds derived from the sale to finance retirement, a new career or to purchase a new business. What is your exit strategy? Do you have one? Do you know what the dollars are likely to be gained from the sale of your business? If you don't know, who will suffer if the real value is way off from what you thought it was?

 

Don't Leave Money On The Table

 

Business Valuations continue to come under increased scrutiny and standardization by the Internal Revenue Service (IRS) and by the American Institute of Certified Public Accountants (AICPA) -

• The Internal Revenue Service on July 27, 2006, released a new version of its Business Valuation Standards. These standards are designed to improve compliance and utilization of resources. Specific attention is given to assist examiners with respect to the review of third-party valuations. Click Here to view the IRS Business Valuation Standards.

• The Consulting Services Executive Committee of the American Institute of Certified Public Accountants (AICPA) recently announced the release of a new professional standard on valuation services, Statement on Standards for Valuation Services No. 1 (SSVS No. 1) "Valuation of a Business, Business Ownership Interest, Security, or Intangible Asset.” Click Here to view the AICPA Standards for Valuation Services.

• The Small Business Administration (SBA) now requires independent, third-party business valuations for all SBA backed loans over $350,000 [SBA Standard Operating Procedure (SOP) 50 10 (5), page 179 Effective August 2008]

Knowing the Real Value of your business is more critical today than ever. Call now to discuss having a Valuation conducted by an Accredited Business Valuator (ABV). Your future, your legacy and your family will benefit and depend on it. Talk to us about your business and having a Valuation. Call us at 610-430-7537 or Click Here to email us.