Mergers & Acquisitions Advisory

A Neumann & Associates, LLC

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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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

  1. 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.

  1. 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

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Andrey O, Investor

“Finally enjoying retirement after recently selling my business using the services of A Neumann & Associates. Joe Oddo provided the conduit to a successful transaction. Joe knew when to inject input and when to simply listen and allow the buyers to vent, step back and regroup. The outcome met our expectations and got us to the finish line, which included my staying with the company six months in order for the buyers to get their footing and keep our workforce in the loop. He helped at every step by providing his expert guidance & resources. Thank you!”

Emily Parker Myers, Co-Owner - Myers McRae

“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

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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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