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Top Reasons Why Business Valuations Are Performed

Business Sale or Acquisition: Whether you are selling or buying a small business, determining a fair market value of the target business is generally considered one of the essential ingredients in the business transfer process.

For Sellers: Determining a supportable asking price is crucial when listing a business for sale in the marketplace. It never makes sense to put a business on the market that is severely overpriced. Industry statistics indicate that the #1 reason why some small businesses don't sell is because they are overpriced. A business valuation performed by a qualified valuation professional or Business Broker can be instrumental in determining a realistic asking price that will eventually result in a sale.

For Buyers: having access to a professional business valuation can help support their offer to purchase, and may also be valuable in obtaining bank financing for the acquisition. Many small business lenders and banks will require a business valuation be performed on the target business before approving acquisition financing is approved.

Legal Purposes: Often certain legal issues such as divorce, estate issues, and business partner disputes may require that a business valuation be performed to cure the issue

Obtain Financing: A business valuation performed by a valuation professional can also be instrumental in helping a buyer secure business acquisition financing. A business valuation can also be very  helpful to small business owners when trying to raise capital  or secure credit for expansion.