Many people feel they only need something valued if they’re getting ready to sell it. But the truth is, it’s useful to know how much your assets are worth for many other reasons too. If you know that your home, for example, is already at the top end of the value scale for your neighbourhood, you might want to rethink the million-Rand renovation project you’ve been planning. Or, if your total personal value is already more than you need to fund your retirement, you might decide you want to implement a gifting strategy to your spouse or children.

Knowing how much your business is worth, and making sure it’s valued regularly to keep that knowledge current, is not just advantageous when you’re thinking about selling. A comprehensive, professionally executed business valuation many other benefits too:

Equitable Partnership Buy-Out

As a business owner, you must know the current value of your company if your business partner is retiring or wanting to leave for other reasons. This is essential for two reasons – the exiting partner needs to be fairly compensated for his share of the business, and the remaining partner/s need to know the numbers in order to adequately structure the buyout. You wouldn’t build a house if you didn’t know upfront what the costs were going to be. Similarly, you wouldn’t consider buying out a business partner without knowing what your business is worth.

Boost Credibility

If you want to expand your business and need finance to do so, an independent valuation gives potential lenders the confidence that your company is worth the money you’re asking for. It’s also advantageous, when trying to attract top level employees, to have a recent valuation, as it elevates your status and makes your business a more attractive employment option.

Facilitate Family Business

If something happened to you, and you were no long able to run your business, having an up to date and independent valuation makes it easier for your family to handle the potential dissolution or sale of the company. It could also be important in the event of there being a divorce, in order to properly divide the assets. A business valuation gives both parties, and the mediator, a good starting point for the negotiation of a smooth settlement.

Make Corporate Planning Easier

It’s always useful to know how much your business is worth simply from the point of view of knowing how much you still have to do in order to get your business to where you want it to be. If you want to grow your company to R50 million before you would consider selling, knowing what’s it’s currently worth gives you a great idea of how much you still need to do, and in what direction you should be taking the business in order to reach your ideal number.

A business valuation expert can also give you different valuation models so you can weigh up different financial forecast scenarios for forward planning purposes. This gives you the insight you need to ensure your business grows and increases in value.

The Property Partnership East Rand is a professional chartered surveying and valuation company that specialises in the valuation of commercial, industrial, retail, development land, residential and specialised properties. Contact us today to arrange a professional valuation of your business.