Each and every organization is broadly classified as a big or small business entity. This classification is only possible if the value of a particular organization is known to us. By knowing the value of itself, a company can be benefitted in various ways. The knowledge of the worth of the company or the organization would help in the comparison of the company with its competitors. The result would not only provide us with information about where the company is lagging but will also act as a guideline for the future of the company.
Valuation or a Company Valuation is the important process of finding the value of a company and can be defined as a group of technical processes which are conducted to assess and provide an approximate economic value of the business. This process helps in establishing the value of the business which would be further useful in any mergers and acquisitions, negotiations, etc. between the company and the various related business entities.
Knowing the worth of your company would help you to understand the workings of the business and will allow you to take corrective measures which would enhance the profitability of your business. It would help you to classify by comparing the worth of your company to others. This information will also better prepare you for the future of the business or when you when winding up a company.
In a partnership business if the partner wants to does not want a member of the partnership or in case a new partner wants to pool his assets with you, independent business evaluations for each partner or each potential partner is conducted. In case of dissolving the partnership, the business valuation would tell us what would be the percentage of share the person would leave with and in the case of a new partner, business valuation is done to find out the total amount of assets the person is bringing in.
Valuation of a company is necessary during the finalization of any mergers or acquisitions. This would allow the investor to understand the economic worth of the business transaction and later help to decide the total amount that is needed to pay. A business valuation is also a necessary step to be taken for bringing in the potential investors to the company.
Finding out the value of the company would provide a chance to compare it with the competitors. This would mean that the management would set some benchmarks which would be necessary to achieve by the company. After setting the benchmarks, the management of the company would take certain decisions which would greatly affect the company and its profitability. A valuation would also help in planning for filing of taxes and to take as much tax benefit as possible.
From time to time, a business requires the help and support of an investor who would provide the finances so that the company is able to run properly. A business valuation would provide a completeand concise understanding of the business and its overall health. On the basis of this knowledge, an investor can decide if investing in a particular company would be profitable for them or not.
A business valuation would provide the management with clear and precise value of the business which would increase the credibility with the banks and other sources of funds. The end result would be a valuation report of your business and it would prove to be a great help when negotiating over price with a bank or a prospective investor
If any kind of court case is applied to the company, any damages of remuneration should be charged according to the value of the company. A proper business valuation will help you to strengthen your case and will not let you be cheated by any lawyer.
An advisor would be a person who would have years of experience in the domain and could help you and the company in determining the correct value of the business. An advisor would keep the highest level of confidentiality. This means that a company could trust him with the sensitive and the confidential data of the company which may be required to come to a certain value.
The advisor would actually be the connecting point between the clients and the business and would clearly explain the valuation process, including the time and technique that will be used to determine the value of the business. Once the valuation process has been completed an adviser will prepare the final report. This report would state the final estimated value of the company.
At Business Setup Worldwide, we strive hard to simplify all the problems that the client puts in front of us, understand the problem completely and finally provide a customized solution for the problem in question. Our valuation and business advisory services would prove very beneficial for any organization and our expert professionals in Nigeria provide you with timely and well-informed advice so that you could take better decisions.
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In case of any query do contact us, we would be happy to help.