The fast changing economic scenario entails companies to keep track of their value for having a better hold on the market. The highly competitive market environment is making the assessment of enterprises fluctuate drastically. Also, you will find many companies that have disappeared from the list few months down the line. Hence, it is crucial to get a certified business appraisal. It will not only serve as a benchmark, but also help businesses in many other ways.
Here are the top reasons why you should get certified business appraisal:
Reporting – You have the responsibility to report the assessment of the company to investors on a quarterly or annual basis. It provides financial health of the enterprise and increases investor confidence.
Fundraising – If you want to raise funds for your business, you would need the appraisal report. It is necessary for both conventional fundraising from banks or for current options which include crowd funding.
Merger or Acquisition – You need a detailed appraisal report of the entire business to enter into any merger, or you decide to sell your business. It is the first step in the whole process of selling. It will help you negotiate a better price.
To Acquire Seed Capital – If you are planning a start-up, you need to determine the value to give investors a reason to raise seed money. A business appraiser values the start-up based on future business potential rather than the current monetary value.
To issue ESOP to employees – If a private company wants to issue ESOP (Employee stock options) to their staff, they need to get the valuation done. The assessment helps them determine the contribution of shares employees can receive annually.
Litigation – It is important to have clear valuation report to face any form of dispute on company assets. The insurance may not cover the loss when and if a business is sued and loses the case. The valuation report makes it easy to come to a decision on selling assets to settle the litigation.
In conclusion, a certified business appraisal is crucial for the worth of the company ultimately depends on its assessment. It is always best to get the report from a certified business appraiser holding a valid license and relevant experience in the field. A report is valuable to find the real worth of your business as well as to know the weaknesses so that you can take steps to correct them, which can increase the value of the firm in the future.