I often have people referred to me say, "I want to get my
business valued. What will it cost?" That's a fair
question. To which I usually respond with three more.
Question 1 – Why do you need a valuation?
The client responses could range from:
- "I want to transfer
shares to a trust for my kids."
- "One of my partners
wants to retire and we want to buy him out at a fair
price."
- "I don't get
along with my uncle anymore. He is hurting the business and I want
to buy him out. My lawyer tells me this will likely go to
Court."
- "We are buying a
business and there will be outside funding. The lender has told us
we will need a Comprehensive Valuation Report."
These four situations are very different. In the first case,
there may not be any transfer of wealth from the family group, but
there will be for tax purposes. In the second case, it may be a
friendly transaction, with no minority discount for a
non-controlling interest. In the third scenario, it may or may
