“If business schools could offer just one course, it would not be on stock trading, the efficient market hypothesis or modern portfolio theory. Rather, B-schools should be encouraging students to learn the boring, but critically important, discipline of business valuation.”
One can’t go past this quote from Warren Buffet that so neatly points out the importance of business valuations. Having a realistic understanding of the value of your business is critical to personal decision-making and planning. Of course privately owned businesses don’t have as easy a mechanism to determine market value as do publicly traded companies, however, there are many sound reasons for SME recruitment companies to become aware of their current value. Business may need valuation for any of the following reasons- may be no active market to set price, determine capital gain, sale of business to family member or outsider, transfer of business under buy-sell agreement, transfer of business interest by gift, estate tax purposes. Business valuation can be used to determine the fair value of a business for a variety of reasons, including sale value, establishing partner ownership and divorce proceedings. The field of business valuation encompasses a wide array of fields and methods. The tools and methods can vary between valuators, businesses and industries.
Business Value is high on every corporate agenda. Value is driven by assets and liabilities, income, management, location, and all these factors make a business unique. It could exist in tangible and intangible assets of a business, an investment, or an intellectual property. In a dynamic global economy, it is critical that a business has comprehensive knowledge of its value so as to capitalise on any value-creating or enhancing opportunities. Business Value is also a critical component for decisions in transactions involving M&A, dispute resolutions, tax structuring, corporate restructuring, and accounting and financial reporting. Valuation can be controversial and subjective so an independent and robust opinion which will stand up to scrutiny is necessary. Additionally, changes within the global business environment in recent years have necessitated the use of professional valuation expertise.
HLB Hamt provides Valuation services which include Fairness opinions for mergers and acquisitions, Business combinations, Share based payments, Fair value accounting , Valuation of financial instruments. At HLB Hamt we stress that a business valuation for companies needs to reflect the industry’s relevant market circumstances and status. Privately owned companies are affected by a range of determinants that impact on pricing at the time of sale. We analyze the factors that determine pricing requires an intimate knowledge of the industry and the comparative values achieved around the country.
HLB Hamt is of the opinion that no matter what, do not use an old appraisal. You may have had your business appraised in the past for another purpose. As tempting as it might be, don’t use an old appraisal now. The purpose of the appraisal can affect the valuation assigned, and time can change the factors that go into the appraisal calculation. The best time to start thinking about your business’s succession plan is a couple years BEFORE you are ready to exit. If you are starting to think about next steps for you and your business, contact us to ensure your business is valued properly and you have a plan in place to mitigate taxes. Over the years, we at HLB Hamt have learned that business valuation is an art and also a science. Our experienced professionals will do an insightful analysis and careful review of the facts, also, they have excellence in accounting, taxation, and financial due diligence to provide you with valuation advice for a multitude of purposes.