If you own or manage a midsize company, do you have a firm understanding of its value? Right now, at this moment? Do you know with certainty how much value you created in the past year? Can you pinpoint where in your business value is being created and where it’s declining?
Do You Know How Much Your Business Is Worth?
Smaller, privately held firms should conduct a detailed valuation at least once a year. Here’s how.
September 14, 2022
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Summary.
Most owners and managers of midsize, privately held companies (family-owned and otherwise) operate from day to day with no clear understanding of their value. Unlike their publicly traded counterparts, they don’t have the benefit of automatic, daily valuation based on stock price, nor do they have teams of corporate strategy executives standing by to analyze value creation. Many leaders of midsize companies also see third-party valuations as complicated, time consuming, intrusive, and expensive. Thus, they undergo them only when they must — for example, when seeking capital for growth. If you own or manage a midsize firm, it’s imperative that you conduct a detailed valuation at least once a year. You could avoid spending precious resources courting the wrong customers, trying to grow areas of your business that are inevitably declining, and failing to recognize and invest in your areas of greatest opportunity. Plus, if you’re approached by a buyer interested in acquiring your company, you’ll be prepared to respond and negotiate. The authors present an easier and more approachable method for valuing your company.