Information determining the value of your business essay

Question 1. What important information could you learn from periodically determining the value of your business, even if you did not plan to sell?

The company’s value is the primary measurement which is used to assess the business’s viability and perspectives. For a business owner, it is highly important to assess the value of the business regularly, because this procedure allows defending the company against crises by identifying dangerous trends (Koller, Goedhart & Wessels, 2010) and contributes to enhancing financial security and competitiveness of the business. According to Whitney (n.d.), the value of the business is formed by different value drivers, such as future performance, financial leverage, cash flow, financial return expectations, deal structure, asset type, exit strategy, etc. The process of determining the value of the business also helps identify current market situation and market opportunities (Reidenbach, 2006). Overall, regular business valuation is crucial for maintaining competitiveness and increasing customer value.

Question 2. Research online business valuation sites. Choose one to summarize describing the services offered and how you think those services would be beneficial to a business owner.

Business valuation is a complex process which involves the analysis of a variety of business factors. The credibility and reliability of valuation are highly important, and should be performed by qualified appraisers (Gabehart & Brinkley, 2002). Most often, for business owners it might be beneficial to hire valuation experts. There are numerous websites providing the services of business valuation. One of such websites is Accuval (www.accuval.net). This company offers corporate valuation services, as well as advisory and liquidation services. With regard to business valuation, the company offers asset appraisal by asset class, valuation for particular business needs. Accuval also offers related services such as financial reporting, risk and asset management, tax management and business planning (Accuval, 2013).

Risius (2007) notes that business valuation professionals and companies should have appropriate credentials, and names four key organizations giving such credentials: American Society of Appraisers, Institute of Business Appraisers, National Association of Certified Valuation Analysis and American Institute of Certified Public Accountants. Therefore, prior to using the services of a business valuation website, it is recommended for business owners to verify the credentials of a particular company.

Feedback. Describe your “aha” moment this week. Did you reinforce something you already knew? Learn something new? Disagree with some concept presented? Did you know there were free business valuation websites available?
I was quite impressed by the idea of regular valuation and by the usefulness of regular valuation. The existence of free business valuation websites was not a surprise for me, but I believe that such websites can be used only for getting a very rough estimate of the business’s value. For more precise valuation, expert services are needed. Another discovery was the list of organizations which can give credentials for business valuation professionals and companies; this information is very useful for hiring an expert in business valuation.