Astute Valuations - Business & Asset Valuation Services
Understand the value of your business to realise it’s full potential & enhance performance with an independent valuation.
What We Do
Business Valuation Services
Astute Valuations was founded with a vision to create a key service for business owners by providing helpful and informative valuations of businesses and assets.
What Is a Business Valuation?
A business valuation is the process of determining the economic value of a business. It’s also known as a company valuation. All areas of a business are analysed during the valuation process to determine its worth and its value. Business valuations can be used to determine the fair value of a business for a variety of reasons including sale value, establishing partner ownership, restructuring, taxation issues, and even divorce proceedings.
The Importance of a Business Valuation
Business owners devote a significant amount of time and effort to increasing the value of their firm by formulating growth strategies with well-defined objectives. These plans are intended to maximize value over time, but achieving those objectives is difficult if you don’t know where to start.
Owners must not only know what their business is worth today but also what supports and generates that value. Far too frequently, overconfidence or apathy on the part of the owner causes this phase to be ignored or downplayed or, at best, based on insufficient data or supposition. In this instance, a valuation frequently serves as a wake-up call for owners who have a skewed or uninformed view of what their business is worth.
BENEFITS
1. Valuations can provide a baseline.
Regular valuations, like receiving an annual physical at the doctor’s office, give a baseline. They act as a guide to what you’re doing well and where you could improve. Your worth may increase in some years and decrease slightly in others (particularly in the event of a market correction). However, you have no concrete evidence of how you’re doing until you know your baseline. Consider a valuation to be a business health check that measures your business blood pressure.
2. Valuations may reveal gaps.
A complete valuation will look at the non-financial characteristics of a business that are the underlying value drivers using key performance indicators (KPIs). Business structure, client demographics, technology utilisation, and company infrastructure are some examples. KPIs are useful in identifying potential areas of improvement for the business and, ultimately, in providing ways to increase value.
3. Valuations aid in forecasting the future.
Valuations can assist you in determining strategies to improve your business. A valuation may imply the need for a technological investment or the hire of an employee. Perhaps you’ll realize that an expense can be decreased or eliminated. Valuations can frequently assist an owner in making a change to the business or in making a difficult decision.
4. Valuations track progress.
Valuations, when performed on a regular basis, provide a reasonably accurate gauge of how you’re performing in comparison to the course you’ve established for your organisation. To be most effective, valuations should be used in conjunction with your strategic business strategy and referred to as a component of any significant decision.
5. Valuations provide a price perspective.
When the time comes to transition (and all firms do), your historical valuations (remember, appraisals should be an ongoing effort) give a starting point for price. You now have a sense of what your firm could be worth to a prospective buyer, whether it’s an external sale or an internal next-generation transfer (though the price is only one component of a deal).
Owners frequently have high valuation expectations; having a baseline valuation and understanding what drives that value can help minimize shocks later on.
6. Valuations assist you in managing your business.
Valuations can be used as a significant motivator of how your organisation is managed. A valuation is used to assess your strategic decision-making process and to provide the opportunity to track performance in terms of the expected change in value rather than just revenue. This allows you to look at your business through an “outsider’s eye” and make decisions that have a significant influence on your bottom line. It enables you to comprehend the delicate dynamics of your business and avoid the unanticipated implications of seemingly trivial decisions.
7. Valuations provide the gateway to capital or funds.
Any lender will sometimes want to know what leverage exists in your business if you are considering borrowing funds for a business investment. Your valuation is the first stage in the capital/funds securing procedure.
8. Valuations can create accountability.
Now that you’ve used a valuation to identify gaps and chart a course for the future (with quantifiable targets), you’ve effectively held yourself accountable for meeting those objectives and can build discipline around them. Remember that this should be part of your strategic business strategy since you can now measure it, and therefore you can now manage it.
9. Valuations act as a benchmark.
With little to no public data on what businesses in your specific industry sell for, knowing your baseline value will help you evaluate your business against competitors and also “Best Practices” standards.
10. Valuations can be part of an estate plan.
The business value typically reflects 50–70% of an owner’s personal net worth. Owners frequently fail to diversify their concentrated equity position in their own businesses. Knowing how the business value affects your personal finances might help you better plan for the future of your family.
Bottom line
The primary goal is to identify the essential value-generating aspects of your business l. To increase your value, you need to focus on the essential value-generating areas of your organisation. Each essential aspect of the business can be given greater attention in order to increase its value and produce more money.
A valuation not only identifies but also helps to resolve all potential issues for the future.
Unquestionably, valuations serve various uses and go way beyond “what someone would pay for your business.” Valuations, when used correctly, allow you to see the inner workings of your business. That information puts you in a competitive position as you work to strengthen and improve the business’s value and overall performance.
KNOWING THE VALUE OF YOUR BUSINESS IS KEY
Knowing the value of your business is crucial.
Whether you are:
- considering selling or buying a business,
- looking to meet your tax obligations,
- undertaking a transaction between shareholders or family members,
- planning a business restructure,
- undertaking a strategic reorganisation,
- or even if you’re seeking a key piece of evidence in a dispute,
Valuations are key to any organisation to accomplish strategic goals and outcomes.