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Foods & Culinary / April 9, 2017 /

Should You Do A Business Appraisal?

Businesses appraisals are simply the economic analysis or professional engagement to execute business valuation in order to find out the actual worth of the business, certain business assets or professional practice. Truth is, this is an extremely important tool in the arsenal of any business owner and should be taken into mind from the very start throughout the business’ lifecycle.

Whether you believe it or not there are plenty of reasons why it is essential to have certified business appraisal and these are.

Reason number 1. Your business is in startup stage and you have to value it to be able to determine how much of it you’ll need to give to your investors in exchange for the seed money.
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Reason number 2. If you have established your business and have to provide either quarterly or yearly updates to investors or stakeholders, then this can give them with a clearer picture of the business’ financial status. This therefore shows them what’s the actual worth of their investment.
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Reason number 3. You might find the opportunity to sell or merge which must be quickly decided. Having an updated business appraisal lets you to make the most of every available opportunity.

Reason number 4. You may want to take on a new partner and need to know the worth of business to be able to figure out the buy-in price.

Reason number 5. With the sheer number of fundraising options in which small businesses can take, it is so important to be aware of the value of your company prior to starting fundraising.

Reason number 6. You might want to build or expand new facilities and presenting your business appraisal to the bank can help a lot in making them decide to lend you money.

Reason number 7. In knowing the annual per share value of Employee Stock Ownership Plan or simply as ESOP, business appraisal plays a vital role as well. When you want to share ownership of corporation with employees, ESOP is used in it as well.

Reason number 8. For the gift tax planning purposes similar to donation to a charity, interest to family members, transfer to intentionally defective grantor’s trust and the likes, having an accurate business appraisal is so important.

Reason number 9. It is crucial for many litigation support purposes like for instance, determining economic damage, uncovering value of a business in partnership or shareholder dispute, frauds, lost profit and so on to appraise a business.

Reason number 10. With this, it is going to be possible to quickly identify whether the business is growing, declining in value or stagnant or not.

Never forget about appraisals when to start up a business.


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