How to Make it Through a Business Valuation When it’s Your Business Being Valuated

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If you are on the receiving end of a business appraisal or comps valuation, it can be a little difficult to come to terms with. Having to be completely transparent with a business valuation firm only reminds you that you are not able to stay afloat on your own. Here are few ways that you can keep your head held high during the process of a comps valuation, no matter what the outcome is.

Realize it’s Necessary
You may have had high hopes and dreams for your company when you first started out but things have come to a head and you’ve realized that you either need to be bought out or merge with a more established company. Small business valuations help to give a realistic idea about whether it is worth it to another company to take on your risks and debt. If any part of your dream is going to stay alive, another company is going to need to help you out. That’s all there is to it, unfortunately.

Don’t Be Emotional
It’s okay to feel sad about the selling of your company but don’t allow your emotions to take over. The problem with this is that it can make you start to hide things about your company, hoping that it will be seen as higher in worth than it really is. Separate your logical time from your emotional time and never make any major decisions during emotional time. Decisions and choices and discussions should only be done during logical time.

Be an Open Book
This is a literal as well as figurative suggestion. You will be asked for a lot of information regarding your company’s assets and debt during a comps valuation. Don’t hold back. The worst thing that could happen is that a company sees your business for what it is and decides not to buy. That is better than buying your company under false pretenses only to sue you later for holding back. If one company decides not to buy your business, there may be another one just around the corner that will want to help you out.

Determine Your Responsibilities
You want to be clear on what is required of you during a comps valuation. Be open and honest with the potential buyer and make yourself available. Most likely they will appreciate your willingness and will be honest with you about what is expected of you during the whole process. Make sure everyone is on the same page about what information will be handed over, how it will be protected, how long you will need to commit to the company and what to do when they make their decision.

Create a Plan
Just because you are selling your business does not mean that your life is over. You have plenty of years left and should use them wisely to determine what your next plan of action is. You need to know exactly what you are going to do next in order to be able to overcome this setback. Will you open another business? Are you retiring? Will you begin a new career path? Your working life needs to be thought about and decided on in order for you to be able to look forward to the next chapter.

Analyse Your Finances
It might be a good idea to sit down with an accountant and determine what you should do as far as your finances go. After your business valuation is determined and you know how much you will make off of the business, your options will open up a little bit but a financial adviser should be consulted first. This is especially true if you have had to sell your business because of poor money management.

Selling your business could be a sad endeavor or a happy one, depending on why you are selling. Keep in mind that you may not agree with the number that the business valuation services come up with and you are welcome to negotiate. However, don’t be too greedy when it comes to the amount you will get; the economy is not what it was and you may not get more. Don’t be trampled but don’t set your expectations to high either.

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