For many small business operators the most valuable asset they may own is their business. 

As no two businesses are the same, there is not a simple look up source that a business owner can go to, to provide an answer to the question, what is my business worth?

To obtain an answer to the question, a business valuation is required.

What is a business valuation

A business valuation is a formal process and produces a valuation report that is required to give proper consideration to many economic and market place factors.  

It is often based on a particular methodology chosen from a range of possible accepted methodologies and can take into account:

• assets backing the business
• liabilities within the business
• or an estimate of value based on the capitalisation of the future maintainable earnings of the business.

Why have a business valuation?

As a business owner, knowing the value of your business can provide significant information that can assist in the thinking and planning required in relation to:

• succession of the business
• business assets 
• and company restructures within a family.

A business valuation is also appropriate when considering the possible sale of the business or the possible sale of part of the business to a business partner. 

It can still be of great importance even if a sale may be contemplated further down the track. The valuation can assist in not only understanding today's value, it can identify areas that need to be worked on to enhance the possible sale value in the future.

There are also times when there is a statutory requirement to know the value of a business or the value of shares in a company. 

For example, when assets are transferred, say because of the death of a family member who held shares in the family company or owned an interest in a business, a valuation of those assets at the time of death is often required for current or future Capital Gains tax purposes.

Regrettably, also family law disputes often require consideration to the value of a business or shares in a company to assist to determine the property settlement outcomes.

We can help

At Johnsons MME we have been helping businesses for many years within the region and beyond, for a wide range of reasons, to know what the value of their business is.

For a further chat about valuing your business then please feel welcome to contact me, or your Johnsons MME adviser, or email contactus@jmme.com.au.