If a small business owner wants to sell a company now or sometime within the next five years, an independent business valuation is an essential first step. If the time is now, then the appraisal serves as the basis for a potential deal structure. Should a potential transaction be further down the road, then the valuation provides information for properly positioning the firm to maximize financial return when the time comes.
“Here at A Neumann & Associates, we require that an independent third party market valuation be put in place prior to any sales engagement,” says company President Achim Neumann. “Our 25 years of experience shows that the benefits to the small business owner are significant in terms of both time and money.”
Why is a neutral-party fair market appraisal so important? Let’s dig a little deeper to determine the benefits for a business owner:
“Since joining A Neumann & Associates in 2010, I have seen many small business owners take advantage of the valuation process to better position them for a proper exit” says Gary Herviou, the firm’s Central Jersey Marketing Director. “Moreover, a smooth transaction is almost impossible without an independent appraisal in place prior to going to market.” An independent fair market valuation is confidential, cost-efficient and not time-consuming for the small business owner. More importantly, it can be completed within 10 days after receipt of all documentsand updated every 18 months at very little cost, which serves as a vital tool for measuring progress along the way.
Michael Gersten, Northern Jersey Marketing Director for the company, makes the point clear. “If selling the business is a possibility, it’s incumbent on the owner to look at the big picture and get the cold hard facts regarding the salability of the company in advance.”
This valuation mindset can be summed up as follows: value now, plan ahead, and maximize return at closing. Well-informed business owners will make effective decisions accordingly and reap the rewards upon exit from the business. The unprepared will just have to take their chances and hope for the best.
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A Neumann & Associates, LLC is a professional merger & acquisition and business brokerage firm with 25 years of experience in New Jersey, New York, Pennsylvania, Delaware and Maryland that assists business owners and buyers with the business transfer process in a completely confidential manner. The company is affiliated with BBN, which has 450 offices, and access to a national network of qualified buyers and sellers. For more information, please contact A Neumann & Associates at 732-872-6777.