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5 Benefits of a Business Valuation
By Quiet Light
As the business owner, you know your business better than anyone else. However, many successful business owners do not fully understand the true value of their business.
“Many successful business owners do not fully understand the true value of their business.”
In this guide we discuss:
- The definition of business valuation services
- Why business valuation services are important
- The benefits of business valuation services
- How to get a free business valuation
What are business valuation services?
Business valuation services determine the true worth of your business. The value of a business is commonly referred to as the fair market value or the fair value.
There are many different types of professional business valuation services, and they vary based on the method of review and the factors considered in the calculations.
Business valuation services commonly include a business’s:
- Profit and Loss (P&L) Statement
“…your business is much more than numbers on paper.”
While these elements are important, you know as well as anyone that your business is much more than numbers on paper. To create an accurate, all-inclusive understanding your unique business, business valuation services need to include:
- Support to clean up financials so that you have monthly P&L statements and accrual accounting practices
- An analysis of business metrics against the Four Pillars of Value
- A thoughtful review of everything that distinguishes your business, like innovative systems, special customer engagement solutions, and effective onboarding processes
- An addback schedule that details expenses that would not transfer to a buyer
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Why are business valuation services important?
Some business owners utilize online business valuation calculators to determine the value of their business. Business valuation calculators are quick and easy to use, but they cannot capture the unique qualities of your business. Plus the numbers they spit out are often inaccurate.
“Business valuation calculators are quick and easy to use, but they cannot capture the unique qualities of your business.”
Business valuation services are important because they analyze and account for factors such as:
- The story of your business
- Your growth strategy
- The stability of your supply chain
- How your brand compares to competitors
- Marketing potential
- Documentation organization
Additionally, business valuation services provide structure and insight that are difficult and time-consuming to achieve while balancing the responsibilities of running a business.
What are the benefits of receiving business valuation services?
Business valuation services are most commonly sought by business owners who are thinking about selling their business. While business valuation services are critical for selling an online business, they are also important for maintaining overall business health and driving growth. Let’s take a look at a number of the benefits businesses can gain from valuation services.
“While business valuation services are critical for selling an online business, they are also important for maintaining overall business health and driving growth.”
Business valuation services:
- Provide a clear understanding of business value
- Reveal strategies to increase business value
- Show ways to improve business stability
- Provide insight into the best time to sell
- Prepare your business for a smooth transition
- Future-proof your business
Valuation Provides a Clear Understanding of Business Value
Owners who utilize business valuation services get a fair, accurate, and comprehensive idea of their business’s value. The services consider all relevant qualitative and quantitative factors and provide actionable insights to drive future success.
Valuation Reveals Strategies to Increase Business Value
Business valuation services shed light on the factors that increase and decrease the value of your business. Business owners can use this insight to focus on high leverage activities that drive growth.
Valuation Shows Ways to Improve Business Stability
Business stability is valuable whether or not you intend to sell your business. Business valuation services allow you to create more consistent growth opportunities for your future self and a potential buyer down the road.
Valuation Provides Insight into the Best Time to Sell
There is no wrong reason to sell your business, but there is a right time and a right way. Business valuation services help entrepreneurs like you strategize the optimal time and process for selling an online business.
Valuation Future-Proofs Your Business
Whether or not you are thinking about selling your business, you have much to gain from valuation services. Many business owners have a strong grasp on current demands, and business valuation services can help them successfully strategize for the future.
Get a Free Business Valuation
Business valuation services consider your business holistically and provide you with key insights that can drive strategic business decisions. To take your business to the next level, book a no-obligation valuation with one of our Advisors today!