Many businesses will be acutely aware of the effects that the repeated lockdown of the economy has had on their profits, cash-flow and solvency. But what about the effects this disruption has had on the value of your business?
Your accounts generally exclude goodwill, the extra value that buyers would be prepared to pay over and above the net assets figure shown on your balance sheet.
When we prepare the next set of annual accounts…
To address this issue, when we next prepare your annual accounts, we will apply a consistent formula to calculate an estimated value for your business at the year end date and for the previous two years, if data is available.
Will this valuation be the amount we could sell for?
Our valuation will be subjective but based on sound principles. It will be a guide to value, but we cannot guarantee that you will be able to sell at the price we calculate. And you may find a buyer prepared to pay more…The real impact of our valuation will be to apply a consistent process over a number of years to map the trend; is your business value growing or reducing?
How much will this cost?
Initially, we will create the first table of valuations on a complimentary basis.
Hopefully, having a clearer idea of the way in which profitability generates value in your business will stimulate a conversation with you to provide answers to questions that we have only touched on thus far. For example, we could consider the following issues:
- When do you want to sell or hand-on your business?
- What sort of figure do you want to sell your business for and how do we plan to achieve this?
- What tax planning could be considered now to minimise tax payable when you do sell?
Bouncing back from COVID
Most businesses have had a stressful time since COVID raised its unwelcome head February 2020. But as restrictions are gradually lifted, there will be opportunities to re-establish profitability and hence start to increase the value of your business.
We look forward to working with you in the coming months and years to achieve these goals.