Have you ever wondered when might be an appropriate time to conduct a business valuation? Many would say, before making a sale or transition of the business. While certainly correct, most business owners can benefit from having a current valuation.

A business valuation helps determine the fair market value of the business and can be an important component in determining gift or estate tax liability. They can also be a useful tool to identify the true value drivers of the business.

Business valuation methods are generally categorized under three techniques: asset approach, income approach, and market approach. How you plan to eventually transition your business, will be an important determinant to deciding which valuation technique is most applicable.

Closely held businesses are challenging to value without an active market for their stock, making an independent valuation a critical step in the process. Valuation discounts for lack of marketability and lack of control may also be available to closely-held business owners.

The IRS carefully examines intra-family business sales. A business valuation by a qualified valuation advisor is strongly recommended to ensure compliance with IRS rules and regulations.

Please join our next Small Business Conversation on February 25. Professionals from Regions Private Wealth Management; Katz, Sapper, Miller; and Cambridge Capital Management will form a panel with over 60 years of combined experience. During our conversation, these experts will discuss the importance of having a business valuation, methodologies, and preferred methods, as well as tools and resources available to properly evaluate your business.