Just as a homeowner needs an appraiser to value their home, a business valuation is essential in planning for and negotiating the sale of a business. Think of this as a “reality check” for the business owner.
A valuation can help to set realistic price expectations. If someone is planning to buy a business, a valuation may protect him/her from paying more than the business is worth. Conversely, someone trying to sell a business interest will want to ensure a fair selling price.
By engaging an independent valuation expert, both the buyer and seller can be sure that the business was valued fairly.