Who is best qualified to value your business?

Every business owner with wants to know, “How much is my business worth?”  The question may be lurking in the back of their mind or they may flat out ask it. The truth is, there are a number of people and resources willing to provide a business valuation…. the question is, who is BEST qualified?

When looking for someone to put a value on your company, it’s important to choose the right resource. You want someone who is qualified, values businesses professionally, and has a successful track record and great testimonials to prove it.

Some business owners turn to their accountant. If your accountant knows your business intimately and understands the current market in your location and industry, he may be a good choice. If this is his specialty, he will be able to tell you how many of his clients have sold similar businesses to yours in the last year.  Where have the buyers of the businesses his clients have sold come from?  If you don’t like these answers, move on.

Financial advisors are also asked to value businesses sometimes. They may be qualified to help clients prepare their business for sale, but is valuing businesses something they specialize in? Do they understand the current market and the state of your industry?

Real Estate agents experienced in selling residential or commercial property may be great in their field of expertise, but here too, a business owner needs to ask about their track record.  Selling a business is a different profession than selling homes or commercial properties.  While a real estate agent may understand the market for homes and investment properties, do they understand the current market for businesses in your industry? In your location? How many businesses have they sold for clients in the last year?

A business valuation assignment is often the first step a business owner takes with a business broker or M&A advisor. Sometimes the valuation assignment leads to a listing assignment. Sometimes the valuation leads the owner to work the next year or two to increase the value of his company.

The fact is, business brokers and M&A advisors are routinely called upon to value businesses. These full-time career professionals understand the current market for businesses in your particular location and your specific industry. They will have a proven, methodical valuation method, a great track record and be able to provide testimonies from past clients as evidence of their success.