Almost all business owners inevitably find themselves facing the question of what their business might be worth. Perhaps you are considering a loan or a venture capital investment to expand your business’s impact, or you are evaluating whether to grant equity to a valued employee.
In many situations, conducting a proper valuation of your business can be an important first step to drafting contracts and other legal documents, including sales agreements.
While you can sometimes get a rough estimate of the value of your company by looking at annual revenues and yearly tax returns, these simplistic views don’t present a full picture of the worth of your business and its potential for growth.
Instead, it is often necessary to utilize an outside expert who can help you comprehensively value your business. Business valuation experts typically use one of three approaches to determine the value of your company:
Under any of the three business valuation approaches, it is important that you have as much documentation available as possible in order to assist an expert in valuing your company. Having your books in order is a fundamental first step to finding out the worth of your company. Prior to undertaking a valuation, you should undertake these fundamental steps:
At Romano & Sumner, LLC, our business litigation attorneys have helped advise countless clients on their options for a business valuation, and we can help put you in touch with a Texas business valuation expert who can assist you. To discuss how best to find out your company’s worth, contact us online or at 281-242-0995.
Romano & Sumner, PLLC