What is a business valuation and why do I need one?

A business valuation is a formal, credentialed analysis that determines the fair market value of a business or an ownership interest in a business. You may need a business valuation for a wide range of purposes, including planning to buy or sell a business, establishing pricing in a buy-sell agreement, estate and gift tax planning, transferring ownership to family members or key employees, resolving shareholder or partner disputes, obtaining SBA or bank financing, setting up or managing an ESOP, and strategic planning. Even if no specific event is on the horizon, understanding the value of your business is foundational to making informed decisions about its future.