Understanding Appraisals

10 Reasons To Have A Business Appraisal Businesses appraisals are the economic analysis or professional engagement to be able to carry out business valuation to be able to determine the actual worth of the business, certain business assets or professional practice. They are vital tool in arsenal of any business owner and need to be taken into account from the very start throughout the lifecycle of the business. There are great reasons for why it’s important to get certified business appraisal and these are. Reason number 1. Your business is currently in startup and you must value it to know how much of it you would need to give to your investors in exchange for the seed money.
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Reason number 2. If you are an established business and need to provide either quarterly or yearly updates to investors or stakeholders, this can give them 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. There’s a chance that you would want to sell or merge which must be quickly decided. As a matter of fact, having updated business appraisal will allow you to make the most of every opportunity. Reason number 4. To be able to figure out the buy-in price, you need to take on a new partner and have to know the worth of the business. Reason number 5. With the load of fundraising options that a small business can take, it is so important to be aware of the value of your company before you start fundraising. Reason number 6. You have to build or expand new facilities and present your business appraisal to the bank which can help them decide whether to lend you money or not. Reason number 7. Business appraisal is vital as well in knowing the annual per share value of Employee Stock Ownership Plan or simply as ESOP. When you want to share ownership of corporation with employees, ESOP is used in it as well. Reason number 8. For gift tax planning purposes such as donation to a charity, interest to family members, transfer to intentionally defective grantor’s trust and the likes, it is crucial to have an accurate business appraisal. Reason number 9. Appraising a business is also crucial for a number of 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. 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. Regardless whether you have a business or just starting up, see to it that it has an accurate appraisal.