For business owners, knowing the exact value of your business can be tricky. Even if you are not selling your business, understanding how much your current business is worth is important.
In an article from The CPA Journal, author Edward Mendlowitz writes, “Most of the [business valuation] needs fall under the umbrella of financial planning, and this article provides a guide to CPA personal financial planners on how to have preliminary discussions with business owners about the valuation process and how it works”.
In the article, Mendlowitz discusses:
- Starting point
- Operating income
- Assumptions needed
- Determining value
Mendlowitz continues, “To save on fees, many CPAs perform “informal” valuations, especially for financial planning purposes. These usually do not follow any standards, and accordingly might not contain all the procedures and steps necessary to obtain a reasonable valuation, possibly resulting in a valuation that would not be in the client’s best interest”. Talk to your CPA today to find out more about business valuations.
To read more, see the full article from Edward Mendlowitz in The CPA Journal.