The valuation of a company is not necessarily an act that must be carried out when you are thinking about carrying out a sales process for it, this activity can measure the degree of value generation of the same, allowing corrective actions to be taken that have to improving the economic condition of the company, it can be a simple whim of the owner to determine if the effort and dedication dedicated to his business have been worth it.
Entrepreneurs know, through experience and intuition, that their companies are much more valuable than the sum of their land, facilities, machinery and inventories. Also that a company “in progress” has a very different value than it would have if its doors were closed to the public, even if it were a few weeks ago; But they are not yet aware of how much the employees who work in them represent for the companies, this is noticeable in service companies.
These are some reasons that can generate an assessment process:
1. One of the partners wishes to withdraw from the company and wishes to sell his shares.
2. You want to incorporate a new partner.
3. Another group of businessmen has shown interest in acquiring all or part of the company.
4. You want to make the company “public.”
5. A new generation of the family is joining the company and it is necessary to equitably distribute the shares between the shareholders who will join the operation of the business and what they have rights to that value; but they will stay outside.
6. The partners are considering converting their company into a business chain under the franchise format.
Regardless of what the entrepreneur’s objective is, valuing his company will allow him to determine its current level of value generation and obtain, from the hand of an independent person or company, an accurate analysis of its financial indicators.