Determining the value of a business: why is that relevant? In the end, isn't it all about the price that emerges in the market?
However, a value does not equal the price of a business. A business valuation is often performed for the purpose of a family sale or transfer. Here it is important to clarify for all stakeholders (including the tax authorities) what the company is worth. Other reasons where a valuation is relevant include divorce, death, damages or conflicts between shareholders.
Managing for value
A valuation helps provide insight into the business and teaches an entrepreneur/DGA to focus on increasing the value of the business, rather than focusing on liquidity or profitability. In addition, the value gives a good indication of the purchase price of the business in the market.
In the market, Adagium still often sees methods where a business value is determined based on past results. Imagine: you get a valuation of a hospitality company just before the outbreak of the corona crisis. Then you understand that past results do not apply in this case.
To value is to look to the future. Even more than before, one cannot rely on the past or standard arithmetic. Right now it is important to work out a business valuation very specifically. Hence, it is wise to have experts determine what is currently the logical price of a business.
Valuation expert
Sometimes entrepreneurs quickly want a global indication of the value of their company. Using the smart valuation tool on waardeeruwbedrijf.nl, an entrepreneur obtains a global value of his or her company based on four questions. This gives a first indication, but to obtain a valid valuation you should always involve an expert.
