Evaluating Business Ownership
Business owners want to know the value of their business for many purposes:
- Future Growth Planning
- Preparation of a Business Enhancement Plan
- Loan Application
- Comparison with Industry Standards
- Preparation for Legal Representation
- Tax Purposes/Estate Planning
- Family Succession
- Divorce
- Entering a Business
- Consideration of a Merger
- Exiting a Business
- Partnership Agreements
- Buy-Sell Agreements
- Employee Stock Ownership Plan (ESOP)
- Going Public/Private
- Compensatory Damage Issues
If your purpose involves negotiating with other entities, finding out at the last minute that you based your positions on inappropriate values can cost you serious money.
You need an Appraiser with national/international expertise to take advantage of pricing policies in different economies. We live in an era of globalization, and all are affected by what happens everywhere. A credible appraiser will have experience in all types of businesses and be able to document his/her success.
To assure the integrity of the process, your appraiser should be an independent third-party with no other business relationship to you.
Because your actions could be challenged in a court of law, you should choose an appraiser who will best support you in that extreme occurrence. Your appraiser should be prepared to answer these questions asked of appraisers challenged about business transactions:
How many business appraisals did you do in the last year?
What percentage of your time is spent in business appraisals?
What business appraisal designations and/or certifications do you have?
What is required to retain these designations/certifications?
How many methodologies did you use and what alternative methods did you consider?
What articles and books have you written on the subject of business appraisal?
Have you worked for this client before and in what capacity?
By what professional practice do you claim this to be unbiased?
Have you followed the departure provisions or does your report meet the standards as set by the Appraisal Foundation, as required by law under the Uniform Standards of Professional Appraisal Practice (USPAP)?
It doesn’t always cost more to get the best. In fact, because of our many years of experience and our reputation in the industry, your Primary Business Consultant can help you, as needed, to secure the services of superior appraisers, accountants and attorneys at appropriate fees. You should be suspicious of anyone who does not advise you to use all of these professionals at the appropriate times and to settle for nothing less than the best.