Understanding the true worth of your business can be a game-changer in your entrepreneurial journey- discover how a professional company valuation can open doors to new opportunities and strategic decisions.
A company valuation is an exercise that results in a fair representation of a business’s worth. This valuation is generally based on the company’s financial state, prospects and hidden assets.
A company valuation is a key first step for business owners seeking to undertake various business activities. Understanding your company’s value means business owners can approach business pursuits with the most accurate information possible, and it will help set expectations that align with what is realistic.
As such, company valuations are useful when faced with a range of scenarios, including the following:
How A Company Valuation Can Help When it Comes to Preparing to Sell
For any business owner considering selling their business, it is crucial to first undertake a company valuation. When in the process of finding potential buyers and during conversations with interested parties, it is essential to have a clear idea of the value of your business. By gaining this understanding, business owners can remain confident in the value of their business and have a clear perspective on expectations. Thus, ensuring that they are not underselling or hoping for an unrealistic value.
A company valuation based on your industry’s market analysis and deal multiples can provide the most accurate estimation possible, allowing you to negotiate realistically.
Utilising a Company Valuation Report for Raising Equity
Before undertaking the process of raising equity for your company, an accurate understanding of your business’s worth is a necessary component to securing funding and enticing investors. You want to ensure that your business and the investors are mutually benefiting from the investment, and neither party is left unhappy by the opportunity due to inaccurate information and unrealistic expectations.
Strategic Planning
While a company valuation should be a requirement before selling your business and raising equity, the exercise is also extremely useful for business owners considering their strategic planning, growth areas and company focus.
Knowing how your business compares to competitors in the same industry enables business owners to identify areas for improvement, as well as recognise the strengths of the company. Being well-informed about the performance of the business will strengthen the company’s long-term vision and aid in internal decision-making regarding resource allocation, expansion, and restructuring choices.
How fds Can Help You
fds specialises in delivering extensive and credible company valuation reports. Over 36 years of experience and a 100% HMRC success rate highlight our expertise in this area and fds’ dedication to providing a quality service for our clients.
Interested in exploring a company valuation? Please get in touch to schedule a confidential, non-obligation discussion.