Friday, March 28, 2008

What is a Business Valuation?

For those of you who are business owners or partner in a business, you will need to know what a Business Valuation is. In short, it’s the process of determining the value of a business with many different things taken into consideration to show what the actual value of the business will be.

Business Valuations are needed for various reasons. When a business is going to be sold a business valuation is used to determine a fair selling price. Business valuations are also used to settle disputes that come up when settling and estate. Divorcing co-owners of a business will need to know the value of their interest in the business so that their divorce can be finalized. And there are several other reasons people may need to know the value of a business as well, but these are the most popular reasons.

A business valuation should only be performed by a qualified CVA, as they will have went through many training programs to hold that title in the valuation field. Getting someone to do this who knows the ins and outs of giving a business appraisal will be well worth it in the long run. A CVA will take the proper steps to make sure all considerations have been included in the report you will be issued. It’s an in depth procedure that should only be done by qualified individuals. If you need one in the Philadelphia/New Jersey area, Mark S. Cherry, of is a CVA or Certified Valuation Analyst and is also a licensed attorney and Certified Public Accountant (CPA). He has the experience to get the job done right!


L. Edwards said...

Nice post. I plan on running my own business soon, so I'll keep this in mind. I can use all the help and advice I can get since I know it'll be tough. More recently I've been thinking about buying a business instead of starting one from scratch. Do you have any suggestions or advice? Thanks!

Mel Eldridge said...

@L. Edwards -- I can tell you this now... Running a business will be tough. I'm sure there will be days you'll want to give up, but if you stick through it and persevere, becoming an entrepreneur will be worth it.

That being said, there are a lot of resources on-line if you're looking to buy a business instead of starting one from scratch. I know there's this site called, and it's like this on-line global marketplace where you can buy or sell a business. You can also use it to find a lender, broker, etc.

I also highly suggest checking out books and magazines, since they're generally up-to date with information. Local small business groups are also good because you can network, and they can update you on the area you plan on doing business.

Good luck!

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