Mergers & Acquisitions Advisory

A Neumann & Associates, LLC

June 25, 2019

The Advantages of Getting a Business Valuation

By Achim Neumann

Graphic by Nick Youngson /

A business valuation refers to the set of procedures used to determine the financial value of a company and its assets. This process is often undergone by business owners who wish to sell their businesses and is also conducted prior to mergers, organizational realignment, and partnership dissolution.

Different elements must be considered when valuing a business. While the company’s bottom line is important, there are other factors to think of like the industry the company operates in, its records and financial position, its competitors, and even the state of the economy

When properly done, the results from a business valuation reduces chances of disagreements regarding the worth of a company. It can also serve as a marker by which the business is taxed, and shed light on how much life insurance will be needed to finance the purchase agreements each party agrees to. The following are the benefits of business valuation.

Buying and Selling

One reason companies go through business valuations is to sell their business. By conducting a business valuation, the true amount that should be paid is made clear to the buyer. The advantage for sellers is that the results help them not to undervalue their business. Even though the process may sometimes be subjective, astute owners keep valuation numbers handy so they have a head start when negotiating for their business. With good valuation data, both buyer and seller get a fair price, and fair deals are lasting deals.

Relationship Dissolution

When founding partners seek to part ways, a business valuation provides a fair method of not only valuing how much the company they built is worth, but how much each partner’s stake is worth so they can be bought out.

A Tool For Making Decisions

Results from a business valuation can be used as a decision-making tool because they consider current market conditions. The process helps business owners navigate the state of the market in order to know if it is a good time to sell the business or to hold out for a more opportune time when they can get higher prices.

Management Drive

Routinely valuing a business is a good practice. It keeps track of management’s performance and sheds light on their strengths and weaknesses. It also shows them what parts of the business need more attention so they can focus and put their best foot forward in those areas.

Listed Entities

Firstly, when going public, the share price of a company is determined by the results of its business valuation. In certain cases, interested parties can decide whether or not to trade on the shares of a company on the stock market by comparing its price to the valuation results. The results can also be used to compare the value of different entities. Portfolio managers also use valuation results to compare corporations and determine where to focus their portfolios.

Planning and Strategic Decisions

Conducting a thorough business valuation is the first step in deciding whether to buy or sell the company, to grow it independently or to join forces with other businesses.

A business valuation also helps companies make decisions about which product or service lines to keep growing, or which client relationships to nourish or sever. A regular valuation also serves as a marker to measure if a company is truly creating value to the market it claims to serve.

Valuing a business is important, whether you wish to sell it, part ways with a partner, or make fate-changing decisions. Used properly, it can be a tool to help the company plan for the future. Looking much closer at a company’s current and future earnings will help business owners determine what areas to focus on building and the more accurate the value derived, the more useful the result of the business valuation will be. Please reach out to us at A. Neumann & Associates with any questions you may have and we will be happy to assist you!

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

Comments are closed.

Any questions? Please contact us at 732-872-6777
Call Now

Client Testimonials

“Working with Marc and his company was a pleasure. What I thought was going to be a just another one of those pushy sales companies was just the opposite. Polite, knowledgeable, and a pleasure to talk to and deal with. Marc handled most of the interaction and he has one of the greatest demeanors. Again, it was a pleasure working with him and his firm.”

Douglas DiCeglio

“I recently completed an acquisition using A Neumann & Associates. Tony Valentino was very helpful and accessible during the entire process. They do a thorough job vetting both parties and got us to the finish line.”

Srini Mudambi

“Claus out of Florida helped us with the sale of our business. We had never done anything like this and him and his team walked us through the process from start to finish. We had some challenges through the process and Claus continued to show up even in the difficult conversations.”

Colby Harris, Co-Owner, Del Mar Designs

“Claus Madsen thoroughly helped us with selling our company. From the 1st introductory meeting explaining to us what was possible, to providing us with resources to assist with the sale. Claus was invaluable throughout the whole sales process. Claus was with us every step of the journey and always made himself available for any questions or issues that came up along the way. If you are interested in selling your business, I encourage you to reach out to Claus and the ANA team so that they can let you know what’s achievable. These guys will make it happen!”

Ron Harris, Co-Owner and Vice President, Del Mar Designs

“A Neumann & Associates is the only business broker I would use or consult with. They have assisted with 3 business sales over the past 15 years with me. They are honest and sincere and have always performed better than my expectations. They are the only one i would use for the sales of my businesses.”

James Belanger, Business Owner

“I wanted to take a second to commend the exemplary customer service from both you [Karin Neumann] and Mr. Valentino. It’s both a rarity in the industry, and very much appreciated.”

Andrew G., Investor

“We worked with Neumann & Associates to investigate the purchase of a research company in 2010 and found Achim to be capable, forthright and realistic. His depth of experience enabled us to fully understand our options, offering creative options that might enable the acquisition. While we didn’t acquire that particular company at that time, we know exactly who to call whenever we’re looking to buy or sell a business.”

Daniel Coates, Buyer

“Purchasing a business through this firm was a pleasure. Gary was very professional and transparent throughout the entire process. I look forward to working with A Neumann & Associates in the future.”

William Klemens, Buyer

“I utilized A. Neumann & Associates to assist in an M&A process. They are VERY thorough in using their time-tested process to calculate the value of investment opportunities, a process which provided a very detailed explanation for the value of the potential opportunity. Additionally, they also went above and beyond to extend other services including connecting with others who specialize in your industry and can assist with necessary steps including legal and accounting. Highly recommended!”

Edward Lane , Business Owner

“I recently contacted A. Neumann and Associates about getting a valuation of my business done. I spoke with Achim, who explained the process in detail. He had his colleague Gary come to my office in order to get a clear understanding of my business, and what I was hoping to accomplish. His patience in answering all my questions and his knowledge of the proper way to market my business gave me great confidence that this is the firm I will be using when the time comes for me to sell my business for max value. They gave me great insight into the steps I need to take now to get the best deal in the future. I highly recommend this firm to anybody who wants to sell now or down the road. They not only know their stuff, their actually just real nice guys.”

Robert Kardane, Business Owner
view all testimonials

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.

call us now
Contact Us for a Free, Confidential Consultation

Experienced M&A Advisors available

Full Name
Email Address
Phone Number
Message