Preparing for the Unexpected: 3 Reasons Businesses Need Periodic Evaluations
Understanding the value of your business is an important part of being a business owner. Surprisingly, many people can tell you the value of their home, car, or boat, but they are unsure when it comes to the value of their business.
It is a common misconception that knowing the value of your business is only important if you are planning to sell sooner than later. However, the opportunity to sell, merge, or expand could come along at any time. Decisions often need to be made quickly, and having a current business valuation available to you would save a lot of time and stress.
Of course we don't like to dwell on the what-ifs in life, but unfortunately our advisors have seen first hand the results of something unexpected happening in the life of a business owner. An illness, death, or family issue can happen when you least expect it. We make preparations for these types of emergencies in our personal lives with wills and life insurance, but many tend to be unprepared when it comes to their businesses. An up-to-date business valuation would be a lifesaver to those helping during a time of crisis in your business.
Eventually, most business owners choose to retire and move on to the next chapter in their lives. We’ve had the unfortunate experience of explaining to business owners that their business wasn’t quite worth what they thought it was worth. This is bad news for the business owner that is ready to sell right now. No one likes to find out that they are going to have to delay a transition or retirement plan.
Therefore, we encourage business owners to get a business evaluation done 3-5 years prior to their transition target date.
We believe this knowledge will help you better understand the necessary steps to prepare your business to meet your transition goals. Not only will this knowledge help you accomplish your long term goals but it will help you understand the short term opportunities and adjustments you have in front of you right now.
In the world of business ownership, readiness is key. Let us help you be ready for anything by evaluating your current business for now and the future. Contact us today to learn more about how Resolution Equity Partners can partner with you.