December 17, 2019

Top Reasons to Conduct a Business Appraisal

By Achim Neumann

Business owners often shy away from conducting an appraisal of their business. This is typical because of the cost attached to the process. However, there are certain situations that a business could face that would make it necessary to appraise their business and have a firm understanding of its value. Read on to learn some of the reasons that you might have to conduct a business appraisal and some that make sense as a savvy business owner.

To Transfer or Gift Shares

Business appraisals allow shareholders to know the value of their shares and how much they can give as gifts to their children or others. In the US, gifts of shares exceeding a certain amount will be subject to taxation by the government.

Requesting for Investment Funds

A company that is looking for investors must have a clear knowledge of what their business is worth before asking for investment funds. While there are different metrics that can be used to determine value, an accredited, third-party business appraisal is usually preferred.

To Give to Charity

Companies who wish to give to charities are able to receive tax deductions for their generosity. However, in order to receive tax deductions, companies are usually mandated to conduct a business valuation.

For Divorce Proceedings

In many states in the United States, if you decide to get a divorce, your partner may be entitled to half of your financial assets. This could also include any shares in a business. In the event of a divorce, a business appraisal will need to be carried out to determine the worth of the business.

Legal Settlements

If a business loses a legal dispute, its insurance company may refuse to cover the payment. In that case, business interests may need to be sold to pay off the debt. A business appraisal will need to be conducted in order to sell these interests.

To Sell Thee Business

If a business owner decides to sell their business, he needs to know what the business is worth so he can decide what price to intelligently ask for. An unbiased third-party business appraisal will give him the info

To Plan for Death

Nobody can live forever. If you are a co-owner in a privately held business there should be an agreement in place that details what is to be done in the event of your death. Typically, this is covered in a buy-sell agreement. However, before a buy-sell agreement can be drafted, a business appraisal is typically conducted.

For Knowledge Purposes

Even if your business is not up for takeover or the subject of a legal dispute, it is always good to know what it is worth. This will help you plan for future moves with a clear vision of your assets and liabilities.

Business appraisals may be expensive, but there are many reasons why they should be conducted. Make sure you use a reliable professional to conduct a valuation for your business.

Whether you’re looking for a business appraisal in New Jersey, business appraisal in Connecticut, or anywhere in the US, let our business appraisal professionals at A. Neumann & Associates, LLC aide you in the process.

About A Neumann & Associates, LLC

A Neumann & Associates, LLC is a professional mergers & acquisitions and business brokerage firm having assisted business owners and buyers in the business valuation and business transfer process through its affiliations for the past 30 years. With an A+ Better Business Bureau rating, the company has senior trusted professionals with a deep knowledge based in multiple field offices along the East Coast and has performed hundreds of business valuations in its history. The firm’s competitive transaction fees are based on successfully completing transactions. For more information, please contact A Neumann & Associates at 732-872-6777 or info@neumannassociates.com

Client Testimonials

“I'm an attorney. I have represented the buyers and sellers of businesses for 20+ years. Recently I had the pleasure of handling a transaction where Richard Wilder of A. Neumann & Associates was the broker for the seller. Mr. Wilder was of great service to his client. He is very knowledgeable and organized. Thanks to his guidance the transaction proceeded smoothly and closed on time. He is highly recommended.”

Nick Ferrante

“Richard, you came to my office a few years ago and were wonderful in explaining your process and procedures. Our company is probably an anomaly in that we sold the majority to two long time employees and I financed them both. Our company is entering its 45th year and is still thriving. The purpose of the note is to thank you very much for the service that you provide. Thank you again.”

John Foug, Seller

“We had a great experience working with Richard Wilder from Neumann and Associates as the sell-side broker for Blade Runners. He was knowledgeable, professional, and clearly had his client’s best interests at heart. Richard helped keep the process smooth for everyone, and thanks in part to his efforts, we found a fantastic owner to partner with. We'd gladly work with Richard and the Neumann and Associates team again.”

Justin Martin

“Very happy with Richard and the entire process. I was on the buyer side of the transaction.”

Isaac Palmer, Jr.

“If you are looking for a professional and informative company that meets your needs, A Neumann & Associates is the company to go with. Ted Kantor went above and beyond to make our experience as easy as possible. Ted was helpful from the start of our process to the end. He was there every step of the way to guide us and answer all of our questions. He handled all of the in-depth communication and followed up on every detail. We strongly recommend Ted Kantor to help you whether you're buying or selling. It was a great experience. We never imagined it would go as smooth as it did. The Laluna's (Andy, Maria & Tony Jr)”

Maria Laluna

“A Pleasure to work with - I highly recommend them! Working with Richard Wilder was a pleasure, and he found us the perfect match.”

Laura Keith-Macario

“This spring we acquired a business that was represented by Richard Wilder at A Neumann & Associates. Small business acquisitions can be very emotional for the sellers and life-changing for the buyers, and Richard was keenly aware of this throughout the process. Although he was working for the sellers and not for us, he knew that most business owners see their business as their baby so the only way to have a happy outcome for his clients was to also have a happy outcome for the buyers. Knowing how nerve-wracking this process can be (think home buying x 10), he never dropped the ball on keeping everyone updated, anticipating potential snags, and guiding us along in the process. We highly recommend Richard.”

Shannon, Buyer

“My business was my baby for over 40 years. It is a tough and cruel world out there when it comes to selling your business. Neuman and Associates provided the professional guidance/protection to get the job done with care and no pressure. In my view a tremendous value. I would recommend them to anyone seeking to sell their business. Eric Storck, president of Blade Runners Inc.”

Eric Storck, President - Blade Runners Inc.

“I’m really impressed with how your firm operates. The focus on confidentiality, the thorough vetting process, and the use of third-party accredited valuations really stand out. It’s easy to see why you’ve built such a strong reputation over the years.”

Ann M., Investor

“Thanks for sending over such a detailed CIM. While I have only reviewed a have dozen CIMs at this point, your company has put together the most comprehensive data and detailed presentation I have seen so far.”

Ben N., Investor

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Contact A Neumann & Associates, LLC

If you are considering selling your business, please contact us to learn more about our comprehensive service spectrum. Our experienced professionals will answer all your questions about selling a privately held business in complete confidentiality. Please fill out our contact form, or call us at 732-872-6777. We will contact you directly and will never identify ourselves to your employees.

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