How to Prepare for a Business Valuation
You’re thinking about getting your business valued. What do you need to do to make sure it goes smoothly and leads to an accurate result? Below is a list of the key documents you will need:
- Cash flow statements, list of debts, annual turnover, and profit and loss statements.
- Details of physical assets such as machinery, buildings, equipment and stock.
- Other assets such as goodwill toward the business and intellectual property (any designs or ideas that you have protected through copyright).
- Legal documents such as leases and insurance policies.
- Registration papers such as business name certificates, licenses, permits and any other papers that demonstrate you comply with government requirements.
- Details regarding competitors, and how your business compares to them.
- Sales reports and forecasts.
- Your business history, including its start date and any ownership and location changes.
- Business documentation such as marketing and customer service procedures, and a staff roster.
- Business plans, including marketing, emergency management and growth forecasts.
- Other details such as business hours and whether the business premises are owned or leased.
- Employees’ job descriptions, skills and experience details, work history, performance reviews and pay rates.
- Supplier agreements and supply prices.
- Customer profiles and direct marketing activities.
Does this look like a much longer list than you expected? A lot of information needs to go into a business valuation to make sure you get a completely objective report. Indeed, personal feelings about your company’s worth are far less important than sound valuation methodology, accurate documentation, seller financing and other factors that could potentially influence value.
We can help you gather and organize the right information for your business in preparation for a business valuation. Give us a call and we’d be happy to discuss all aspects of a valuation with you.