You own a business and you “think” you know just how much it is worth – you may take into consideration the assets such as computers, equipment, vehicles and buildings, and you may consider what the usual profits are and where they may be at the end of the business year. By doing so, you believe you have generated a realistic figure for a bank or even a buyer. While certainly important, this is probably not an accurate picture, or a “real world” figure for your business.
Business valuations take more than just a snapshot of a business; they examine every level of operation to see what the true, up to the minute value of any particular business really is. Business valuations require income stream information, debt information, property and equipment values, and set a realistic value in the face of the current market or economy. That’s why business valuations are necessary.