Are you looking for investors to jump on board to propel your business in a new direction? Do you want to sell your business to take on a new adventure? Perhaps you are busy with succession planning for your business due to possible retirement or estate duty purposes. Or maybe you are part of a significant business restructuring to streamline and expand operations?
Chances are highly likely that you will need to determine the value of your business.
A business valuation is a process where a value is placed on a business, or a business unit, based on the business’s historical and expected financial performance.
It is critical for a shareholder or business owner to know what their business is worth when making business decisions and to maintain business strategy. These decisions can include-
Furthermore, section 114 of the Companies Act, No. 71 of 2008, requires that an independent expert report be obtained when certain transactions are proposed, such as the repurchase of more than 5% of a particular class of issued shares. The report must determine the fairness and reasonability of the consideration on offer in respect of the proposed transaction and requires that a business valuation should be performed to determine whether the value of consideration on offer for the transaction is appropriate
A business valuation will also help when negotiating with potential investors and financial institutions to raise capital. Business worth is also vital for individuals with a direct interest in such businesses to do proper estate planning or in the unfortunate event of marital dissolution.
The valuation of a business unit is a complex affair, and different methods can be used to value a business. Depending on the size, nature and its’ assets and industry information available for the business, the following are some of the methods that can be used by professionals to value a business:
You will likely find a need or be required to place a value on your business at some point. Leave the complexity of the valuation methods and calculations in the trusty hand of a professional, and do not try to figure it out on your own. We at ASL can advise and guide you on your business decisions to maintain business strategy. By conducting a valuation on your business, we will ensure that the value placed on yours is a true reflection of its worth.