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FAQs about business valuation

On Behalf of | Mar 31, 2023 | Business Law, Estate Planning |

Whether you are getting your estate plan together or have thought about selling your Oregon business, the topic of business valuation has probably come up a time or two.

If you are unsure where to start, here are some common questions about business valuation.

What is a business valuation?

A business valuation is, as it sounds, a way to determine the value of your business. Business valuation is a vital step for estate planning and several business arrangements.

What factors affect a business’ value?

Many factors can affect your business’ value, such as current financials, expected growth, market health and the size of your customer base. There are three methods to determine value: income, asset and market-based. Income-based valuations examine your company’s potential for financial growth. Asset-based valuations assign value by finding the net worth of your assets, such as buildings, equipment and intellectual property. Market-based valuations compare your business to similar companies in the industry to decide how much it is worth. A valuation expert can help you choose which method will work better for your unique situation.

Who determines the value?

Typically, accountants and certified value analysts handle business valuations. It is imperative to hire someone who has your interests at heart to oversee the valuation process. Further, employing the services of someone already familiar with your business can promote a more accurate valuation amount.

Whatever your reasons for obtaining a business valuation are, be sure to work with someone you trust and who has a proven track record of success and experience.