Business valuation is a process and a set of procedures used to estimate the economic value of an owner’s interest in a business. Valuation is used by financial market participants to determine the price they are willing to pay or the value a seller is willing to accept to effect a sale of a business.
A business valuation is a process of determining the economic value of a whole business or company unit. Business valuation can be used to determine the fair value of a business for a variety of reasons, including sale value, establishing partner ownership, taxation, and even divorce proceedings.
In order to receive a fair price from the sale of your business, you need to establish its value accurately. While you may have a good idea of what your business is worth, you should still consult with a professional business valuator to confirm or determine this crucial figure.
A professional valuator will help you examine what it is you have to sell (inventory, equipment, customer lists, contracts, etc.), whether your business is worth more whole or in pieces and how much of the value is dependent on you being at the helm.
In Canada, the professional business valuators are governed by The Canadian Institute of Chartered Business Valuators (CICBV). Members of the CICBV are financial professionals who have met rigorous professional and education standards and received the designation Chartered Business Valuator (CBV). Businesses of all sizes rely on CBVs to provide expert valuations for many kinds of business transactions.