The Purpose of a Valuation

It is foolish to expect a pilot to fly an aeroplane without any instrumentation.

A pilot needs flight instrumentation displays and data to safely fly the plane to its destination.

Why then do some business owners in today's age of powerful analysis tools try to manage their most important asset without any clear financial analysis or financial goals for the business?

The starting point for a business valuation is to gather, organise and analyse the financial information of the business. The resulting ratios are analysed and where possible compared to those of competitors and to industry standards.

A business valuation can therefore be used by a business owner to manage the business effectively and to ensure that the business stays on course to achieve the ultimate goal of maximising shareholder value.

We have many business owners who have their businesses valued as part of their annual business review process with shareholders. Placing the right value on your business is essential for both short and long term business planning and often our valuations are the dose of reality that enables business owners to make the right planning decisions.

BVA has assisted business owners throughout South Africa and beyond South Africa's borders with the valuation of their respective businesses.

Here are more good reasons to get a business valuation done by an independent, professional appraiser:

  • Sell your business
  • Valuation report for the DTI's Equity Equivalent Programme for Multinationals
  • Provide a lender with valuable information for a business loan
  • Plan for a merger, acquisition or share offering
  • Wealth protection
  • Transfer of the business into a trust or create a succession plan
  • Determine the value of assets and liabilities for a divorce settlement
  • Assist attorneys in litigation
  • Settlement of an insurance claim
  • Set up an employee share ownership scheme or trust (ESOPs)
  • BEE transactions
  • Independent Expert Opinion of Value
  • Management buyouts
  • Key-man insurance
  • To raise additional capital from investors
  • Resolving shareholder disputes
  • To meet IFRS requirements
  • To increase or decrease shareholdings in subsidiaries or associated companies
  • Arbitration proceedings
  • Value a business in terms of requirements in a legal agreement eg: shareholder agreement, members agreement,contracts etc.
  • Divorce proceedings
  • Litigation support
  • Partnership dissolution and partnership disputes
  • Loss of income calculations
  • Business interruption claims calculations
  • Value determination for partnerships and partners interest

Whatever the purpose, a valuation can play a key role in helping you achieve your financial and wealth management goals.

Purpose and reasons a business needs a valuation - to guide business owners to make the right decisions

Business Valuation Advisors

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