How a Business Valuation can serve as an Annual Checkup for Your Company
Lance Wallach CLU, ChFC: Noted Author on CPeasy Bisk Education athttp://www.cpeasy.com/CPE-Authors.aspx
Just as most people get a checkup at least once a year to evaluate their current condition. Standard tests such as blood pressure, cholesterol levels and heart rate tell a lot about your physical health.
Just as annual checkups are important to assess physical health, an annual evaluation of a business can tell a lot about its fiscal health.
How an Annual Business Valuation can help Your Company:
Accountability and Performance: A yearly business valuation assesses how value is created, increased, or diminished based on strategies that management puts in place.
Estate Planning Purposes: With impending changes to estate tax law, business owners must reassess the value of their business to understand how the new laws will impact their estates. Previous insurance policies and estate planning may no longer cover the potential tax consequences.
Buy-sell Agreement: An annual valuation helps set a standard for the value of your company’s shares for buy-sell agreements.
Internal communication: This is an opportunity to let management and key employees see how they are impacting the value of the company. Many companies tie bonus and compensation to overall company value.
Financing: Companies in need of lending will find lenders much more willing to work with business owners who understand the value of their business. A valuation lets lenders and outside parties know the current value of their investments.
Investment Options: An annual valuation can enable your company to use shares and equity as currency in the merger or sale of another company.
ABOUT THE AUTHOR: Lance Wallach, National Society of Accountants Speaker of the Year and member of the AICPA faculty of teaching professionals, is a frequent speaker on retirement plans, financial and estate planning, and abusive tax shelters. He writes about 412(i), 419, and captive insurance plans. He speaks at more than ten conventions annually, writes for over fifty publications, is quoted regularly in the press and has been featured on television and radio financial talk shows including NBC, National Public Radio’s All Things Considered, and others. Lance has written numerous books including Protecting Clients from Fraud, Incompetence and Scams published by John Wiley and Sons, Bisk Education’s CPA’s Guide to Life Insurance and Federal Estate and Gift Taxation, as well as AICPA best-selling books, including Avoiding Circular 230 Malpractice Traps and Common Abusive Small Business Hot Spots. He does expert witness testimony and has never lost a case.
– Call Lance Wallach for expert Business Valuation at 516-938-5007 -