Many a time it becomes vital to have proper valuation of business. This appraisal may not be necessarily at the time of selling your business, whether large or small business. At times, it is advisable to simply know the worth of your small business. A small business owner often finds himself in untested waters when it comes to business valuation.
There are three major sources of business valuation – accountants, financial advisors and business brokers. Accountants falling in CPA category are supposed o be the most ideal candidate as business valuers. CPA’s are possibly the only sources that follow some technical methods to arrive at the final ‘price’ or worth of business. Financial advisors may or may not have any formal education in the capacity of business valuation. In this case their experience becomes the main parameter of evaluation. A small business owner should first have some background check on this category of experts. Third category of brokers is certainly not advisable to become business valuation experts unless the situation is very compelling or desperate. People belonging to this category are less of valuers and more of ‘fixers’ who can get you a customer for buying out your business. Brokers should be contacted only when you are planning to sell your business, and usually not when you are trying to know the ‘worth’ of your business.