One of our greatest assets in Boone County is the variety of businesses that have been operating for many decades. These businesses have built impeccable reputations and our community has come to rely on their presence. However, as business owners near retirement, there has not been a proper way to help them transition their businesses. Until now.
Boone County Development Agency (BCDA), in partnership with the Nebraska Business Development Center, has created a Business Valuation Program to help all businesses in Boone County properly value their business for transition.
What Is a Business Valuation?
A business (or company) valuation is a process that analyzes all areas of your business to determine its worth. It provides you with the economic value of your business for the purposes of determining a sale price, establishing partner ownership, or any other event that requires a monetary value to be placed on your business. These can be conducted for the entirety of the business or specific departments individually.
Business valuations are typically conducted by professional business evaluators who will provide an objective estimate of the value of your business. Business evaluators consider several business elements when determining a business valuation such as sales and earnings history, cash flow, and quality of inventory, among others.
- Business valuations provide the economic value (FMV) of a business and/or its departments.
- Business valuations are typically used to determine the fair market value of a business.
- Professional business evaluators can provide an objective estimate of the value of your business.
Why is a Business Valuation Important to Transitioning Your Business?
If your goal as a business owner is to keep your business open for generations to come then having a business valuation is extremely important. Business valuation experts have seen business owners either greatly overvalue or undervalue their businesses. When this happens you either leave one side of the business transaction feeling like they didn’t get a fair deal, or your business does not sell at all.
Business valuation is an essential step in business transition planning. If done early enough, it can help you see where your business needs more help to increase its value for a sale or transition. If your goal is to transition in five, 10, 15, or more years, this will help you make the correct adjustments now, which can lead to increased profits while you are still operating.
If you are hoping to transition sooner than five years, then a business valuation will help you set the asking price to start marketing your business for sale.
- Business valuations are important so that both the seller and buyer feel satisfied with the transaction.
- Business valuations can help business owners see areas that need more help to increase their profitability.
When to Start Your Business Value and Transition Planning
Business transition planning should start the day that you purchase or start your business. However, we know that most business owners don’t think of transitioning that early.
Proper business transition planning can take up to five years to ensure that your business is ready for a successful transition. If you are thinking of retiring soon, then now is the time to start your business valuation and transition process.
- It’s never too soon to start planning your business transition/exit strategy.
- Do not wait until you are ready to retire to start thinking about business transition.
- If you are nearing retirement, it is essential to start business transition planning now.
BCDA’s Business Valuation and Transition Program
The intention of BCDA is to be a helping hand to your business during every stage. That is why we partnered with the Nebraska Business Development Center to create our Business Value & Transition Program.
By partnering with business valuation expert, Odee Ingersoll, we can provide you with the right tools to successfully transition your business in Boone County. This program not only provides you with the education you need but also with a grant of $1,000 to help pay for the valuation process.
BCDA’s Business Valuation Program Steps
- Attend the Introduction to Business Value & Transition.
- Schedule a One-on-One Consultation with Odee Ingersoll.
- Apply for a Business Valuation Grant through BCDA.
- Complete a Valuation Report with Pinnacle Consulting.
You can learn more about BCDA’s Business Value & Transition program here. Or contact our office to set up a meeting with a member of our staff. We are happy to walk you through the program and how it works.