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Families in Business Need Valuations

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Families in business are proud of their hard work, success, influence in the community and the legacy they have built – all under their own name. This is a unique situation that typically is shared only by family business owners, but it can often lead to an unrealistic expectation regarding the actual value of the company.

An inaccurate view of what the company is truly worth can potentially lead to a dangerous situation.While on the other hand, having a realistic understanding of the true value is at the heart of strategic planning.

  • When you know what the company is worth (or not worth), you can be proactive regarding changes, moving in a new direction, expanding the footprint, or consider building strategic partnerships
  • Knowing the worth and potential for growth can enable you to access better funding/capitalization options
  • When you know what the company is worth you can develop a more practical success plan
  • When you know what the company is worth you can prepare it for sale or merger, and negotiate the best price
  • In case of an unexpected emergency, such as the death of one of the owners, you can be sure that the buy-sell agreements are accurate and reflect the value of the business

While family members may think that conducting a business valuation may seem like a costly and time consuming venture, it is worth it in order to minimize the chance for a major misstep that could ultimately cost the family far more in the long run!

Tom Gudowicz
Sobel Valuations
tom.gudowicz@sobelcollc.com