How to Best Perform Business Valuation : 3 Methods
A look at the reasons why a business benefits from having a valuation and how that valuation could possibly be done.
Many believe that the process to value a company is carried out only at the time of selling or buying the business. Frankly speaking, business valuation is a versatile tool which has a great impact on the action of managers. When used as a business performance indicator, business valuation can demonstrate which direction the business is heading. It identifies which strategy is working best from the business perspective. Companies that have several subsidiaries, have to decide how to distribute their resources. Valuation is a major part of the filtration process. Business units showing the largest growth value and making a bigger contribution to the total value, should ideally receive a greater slice of the resources pie. Read the full article.
And some more on valuation and transfering ownership from here:
Over the next 30 to 40 years, recent studies estimate that as much as $30 trillion in wealth will transfer to the next generation. Much of this wealth will come in the form of private business interests.
How much is your business worth? That is important information when deciding whether to transfer ownership to the next generation, or whether it makes more sense to sell the business to a third party and give the next generation the sales proceeds (or alternative investments purchased from those proceeds). Here is a closer look at business valuation methods and the current state of the merger and acquisition (M&A) market. Continue…