20 Reasons You Should Have Your Business Valued

Businesses are very important to their owners and can provide their living, independence, financial security, and, if properly handled, a payout when the owners are ready to retire. Finding out the value of a closely held company can provide valuable insights to the owner.

Below are 20 reasons to have your business valued, which are from the article, “50 Reasons for a Business Appraisal” written by Edward Mendlowitz and featured in the National Association of Certified Valuators and Analysts (NACVA) May 13, 2015 QuickRead.

  • To know what your business is “worth.”
  • To have an idea how the market would value the business should you want to sell.
  • To establish a process that would make your company more marketable should you decide to sell or when you are ready to sell.
  • To evaluate an offer from someone who has expressed an interest in buying your business.
  • To create a bigger playing field for you to assess the results of your decisions or potential for wealth creation.
  • To identify weaknesses or areas that dissipate value.
  • To establish a buy-sell agreement and a method of automatic adjustments.
  • To update buy-sell agreements
  • For shareholder or partner disputes.
  • To consider and use the value in connection with the purchase of business or owner life insurance.
  • For your personal financial planning.
  • For gift tax purposes such as ownership transfers to a child, donations to a charity, transfers to grantor trusts, or installment sales to a defective trust.
  • For estate tax reporting purposes.
  • For succession planning.
  • To determine a base line and value growth for phantom stock arrangements.
  • To value assets in marital dissolution.
  • For prenuptial agreements.
  • To be used in or to get started with strategic planning.
  • To indicate how to recognize, maximize, build, or grow and realize full value of strategic value.
  • To help identify whether the business is a growing, stagnant, or a wasting asset.

Business Valuation services take into consideration not just historical numbers but also an entity’s economic outlook and industry, management and workforce skills, the company’s stature in its market, and the competition.


Ryan B. Brown, CPA, CVA

Senior Manager

Ryan specializes in providing accounting, auditing, and tax services in industries including truck dealerships, contractors, nonprofits, and other closely held businesses. As an Audit Manager, Ryan is involved in planning, performing, and supervising audits, reviews, and compilations. He also provides tax services for audit, as well as individual clients.