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

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Client Testimonials

“I had been in touch with Karin and Gary from A Neumann & Associates regarding some opportunities and was looking forward to meeting with them. Hence, when they organized a seminar in Princeton, NJ, I was quick to sign up. The seminar was very informative as the team walked the attendees through various scenarios and referenced real life buying/selling situations they had been through. The sessions by Gary, Karin and Achim were crisp and focused and brought clarity to potential seller and buyers. I strongly recommend the team and look forward to continue working with them.”

Gaurav Tyagi

“Thank you for your Event on "How to value, Sell, and Buy A Business for Maximum Profit" and the insight into ANA’s approach on what is involved in the Business Exit for sellers. Garys Hervieiou's "Business Valuation", Achim's "Deal structure" presentation and Karin’s "Preparing the Package" are real street knowledge shared. They answered attendees questions which makes it more interesting for learning from others. Great for small businesses like us. The presentations were totally worth our time and travel for the event to Princeton, NJ from Rockville MD. Ravi Bhutani, President, CIPS”

Ravi Bhutani

“Gary, this is to thank you for an excellent job done in selling our business. We could never have done it without your professional expertise, dedication and time put in without reservation to make it happen. We will gladly and highly recommend you to anybody in our position.  It was a pleasure to work with you.”

Pat Iammatteo, Owner

“Your vetting is simply outstanding, among the best I've seen from a broker.”

Eric H., Investor

“I recently contacted A. Neumann and Associates about getting a valuation of my business done. I spoke with Marc, who explained the process in detail. After meeting with Marc 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 to sell my business for max value. Working with Marc at A Neumann & Associates was very easy and professional. I did not know all that was going to be involved in selling my business but they helped me through the process. 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. I highly recommend this firm to anybody who wants to sell now or down the road. Marc not only knows his stuff, but actually is a real nice guy.”

Double Diamond

“Used A Neumann & Associates to sale my business. could not imagine having done it with out the patience and experience Gary provided. Thanks Gary,”

Dennis Frazier

“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
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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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