Whenever a company merges with another company, is acquired by another company, or sold, a valuation is necessary.
Obtaining a valuation by a CVA before offering to acquire an existing business greatly assists in making a prudent investment decision of price, market, competition, and opportunities, and known and potential challenges. Likewise, starting a business is greatly assisted with a determination of business value, determined by a professional analysis of market conditions, competition, industry ratios, cost of capital and other metrics that CVA’s are professionally trained in.
According to NACVA studies and a review of age demographics, reveal that during the next 10 years, so-called Baby Boomers will be retiring. In America, there was an explosion of births during the prosperous postwar period between 1946 and 1964, These retiring parents who represent the wealthiest generation in history and whose major assets frequently consist of interests in closely held businesses, will need assistance with their succession planning. Succession planning entails transferring their businesses in the following ways:
Regardless of the above alternative selected or for an outright sale through a business broker or not, a valuation is usually necessary.
A business owner puts blood, sweat and tears into their one major investment: their business. For retirement planning these hard working entrepreneurs want to know what their business value is right now, and with additional assistance of a professional with a CPA or CFO level of experience such as we have at Financial Horizons, these owners can get a value currently to use as a bench mark of their business value in today’s market. With the professional’s examination from the course of the professional business valuation often times there are recommendations and implementations that can be separately contracted for to assist in growing your company’s value.
The new 2018 tax law, known as the Tax Cut and Jobs Act. Valuation professionals, and certainly business owners, are faced with a number of new and complex valuation considerations. Also involved here are tax planning associated with rights/restrictions of ownership interests in Family Limited Partnerships, Family Limited Liability Companies, Limited Liability Companies and other non-traditional legal entities.
Valuations are often required for situations involving Partner disputes, Dissenting shareholder actions, fairness opinions, and divorces.
