This document discusses the importance of business valuation. It notes that business value is essential for planning and maximizing opportunities. Common valuation techniques are based on earnings multiples, and key internal factors are a company's earnings level. External factors like industry and management can also impact value. Additional elements to evaluate include industry, financial records, management team, and customer concentration. Accurate business valuations are important for succession planning, IRS assessments, and developing retirement or estate plans. The conclusion states that without proper valuation, owners may sell at undervalue or heirs pay incorrect estate taxes, so valuation is a worthwhile investment.

1. Business Valuation

2. Introduction
● Business Value is essential to planning your
future and maximizing opportunities.
● The most commonly used valuation technique
is based on a multiple of earnings.
● The primary internal factor in determining value
is the company’s earnings level.
● External factors may be less obvious, but can
have just as much impact on value.

3. Some additional element of the
business that should be
evaluated:
● The nature of your industry
● Does the company have accurate financial
records
● Is there a solid management team in place with
a dependable staff, or is the company owner-
dependent
● Is there volume concentration with one or a
small number of customers

4. Importance of business valuation
● Business succession planning
● The IRS needs to know the value of the
business
● It is important for the process to be conducted
objectively by a qualified licensed appraiser.
● This estimated value of the business may be
useful data for the owner in putting together a
succession, estate or personal retirement plan.

5. Conclusion
Although many business owners have a vague idea of what their
companies are worth, most are merely guessing – and over time,
such guesswork can prove costly. In the worst case, not knowing fair
market value could cause owners to sell their businesses for less
than they actually are worth – or for heirs to pay more than their fair
share of estate taxes after the owner’s death. For these reasons, the
cost of a business valuation can be an excellent investment.
●
● Thank you
Done by: Davidstar Warjri

6. Conclusion
Although many business owners have a vague idea of what their
companies are worth, most are merely guessing – and over time,
such guesswork can prove costly. In the worst case, not knowing fair
market value could cause owners to sell their businesses for less
than they actually are worth – or for heirs to pay more than their fair
share of estate taxes after the owner’s death. For these reasons, the
cost of a business valuation can be an excellent investment.
●
● Thank you
Done by: Davidstar Warjri