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Assessing the value of a business appraisal

Mar 26, 2011 Karen Umpierre

Assessing the value of a business appraisal
Having a professional business valuation can be useful not only for companies on the market, but for any business owner looking to make informed decisions about his or her future, writes Karen Klein for Bloomberg Businessweek.
 Sometimes an opportunity to expand the business will pop up and an owner will need to quickly find an outside investor. Other times a company isn't even looking for a buyer when an offer arises, Klein says. If that happens and the owner doesn't have an idea of the value of his or her company, there's no way to put the offer into context to make a decision. Owners can be surprised by the value of their companies, and not always in a positive way. Klein explains that the effort an entrepreneur puts into founding, running and expanding a business doesn't directly relate to its value. Rather, business valuation analysts are looking at your company's potential to make money in the future. When looking for an appraiser, business owners should beware of the low-cost, low-wisdom software, according to Inc. magazine. Good bookkeeping and accounting records can help with the valuation process, but owners can spend anywhere between $3,000 and $35,000 for a report ranging in scope from summary to comprehensive.