While reading a favorite blog in my industry i came across a very timely article I wanted to share.  All I can say is Outstanding Post – as a fellow Certified Machinery and Equipment Appraiser in Indianapolis this type of basic and fundamental information is great to share as it is affecting all of us across the country. I know here in the Indiana / Midwest area business owners are seeing substantially less dollars for their business – usually a lot of this has to do with the capitol assets taking such a beating these past few years. Another thing to consider is that now may also be a great time to sell – the economy has created a lot of investors looking to give a cash infusion to a good core business and grow it either for a sale later or because it is easier to buy a business vs. starting a new one in certain situations.

Here is the Post:

Financial Advisors Urging Business Owners to Know the Value of Their Businesses

Because of the economic downturn, many business owners are reluctant to think about the value of their businesses. Fearful that their businesses have lost value, it’s the last thing they want to hear about. An article in Financial Advisor suggests that many business advisors are urging their clients who own businesses to have their businesses valued in order to gauge their business health and for planning purposes, including adjusting estate and succession plans.

Business owners have different reactions when they find out that their businesses are worth less than they once were. Some decide to delay selling their business, and others use it as an opportunity to make necessary changes. One business owner who was interviewed said that he was glad to know the value of his business because it enabled him to determine steps he needed to take to improve the business and prepare to potentially sell it within 10 years.

According to experts, some businesses are worth 30% less than a few years ago, and they argue that understanding the value of a business can help owners determine whether or not they should sell their business or bequeath it to the next generation. On a positive note, a lower valuation can benefit owners in terms of taxes right now. The article highlights the fact that if owners are planning to pass on the business to their children, now might be the time to do it, since estate taxes are “expected to rise next year and new restrictions on use of trusts could also be coming soon.”

By: Present Value

Certified Consulting Group Blog Written by Nathan Bazzle, CMEA