If you're a business owner, it's easy to get caught up in the month-to-month or year-end numbers. But when it comes to putting a price tag on it, how are you supposed to figure out what your business is worth?
I’m joined by Shannon Farr, CPA, who’s an expert in all things business valuation.
Shannon and I talked about the three standard business valuation approaches and more:
- How to figure out your business's value if it owns a lot of intangible assets (like copyrights, trademarks, and trade secrets)
- Why you might need to do your own due diligence inside your business before the valuation process
- Why the Income approach is the most popular way to calculate a business's value
- What you need to do now if you may be looking to sell or take an investor in your business in the future
- Why it's difficult to compare your small business to other similar businesses in the market
- Important things to discuss with your CPA if you’re preparing to sell your business
- How getting an independent valuation is kind of like an appraisal for your business
- Why you shouldn’t be afraid of business valuation as a small business owner
Key takeaway: Business valuation might seem like an avoidable expense, especially if you’re a small business. But placing the right value on everything you’ve worked to build can help you make sure your exit from the business is a positive one, so you don't leave money on the table.
Additional resources:
Shannon Farr: https://www.elliottdavis.com/people/shannon-farr
Heather Pranitis, Number Nerd Bookkeeping Solutions: www.numbernerdbookkeepingsolutions.com
This podcast is information, not legal advice specific to your situation.
