Business Valuation for legal and strategic purposes
Business valuation is most often thought about when selling a company. However, valuing a business should not simply be the end result ? it should be the beginning strategy. Business valuation aids in all areas of strategic planning and financial planning. Business valuations are also consistently used to establish buy-sell agreements, key-man insurance policies and in-dispute resolution. An estate is at a disadvantage if the IRS values the business when going through probate issues. You are at a disadvantage if your spouse’s attorney values your business when going through divorce procedures.
There are many continuing legal and strategic reasons for valuing a business. The strongest CEOs make decisions based on tangible, objective and validated information. A valuation may only be as good as the company’s reputation for providing them. Never choose to use a rule-of-thumb or some other method of valuing a company because it returns the right value for you. Eventually, and maybe when you come to retire, the value of the business is going to be real. Don’t wait until it is too late to effectively increase the value of a company based on the strategies used every day. Ultimately, whether for business or legal planning a valuation is going to come down to a credentialed document, if you want to trust the paper it’s written on. When valuing a business, accountants and lawyers may not fully understand the complexities involved and may not offer the most objective conclusion.
Houlihan Smith & Company is an investment banking firm that provides a comprehensive array of valuation and financial advisory services. Houlihan Smith is experienced in handling highly complex and sensitive issues for its clients.
Houlihan Smith can also assist in the division of business assets, such as closely held stock, general and limited partnership interests, professional practice partnerships, goodwill, intangible assets such as patents and loyalties, defined benefit pension plans, and increases in value of otherwise separate property.
Houlihan Smith can assist in property identification and classification with the division of items such as the identification of assets, classification of assets and the division of community property for equitable distribution. Houlihan Smith will determine the correct standard of value, including fair market value, fair value, investment value, intrinsic value, or liquidation value.