Determining the value of your business interest is important for many purposes:

	estate planning,
	business succession planning,
	buy-sell funding,
	charitable giving, and
	financing.

The difficulty of valuing a closely-held business interest is that it is complex. Many quantitative and qualitative factors must be taken into consideration. Where the value must be clearly supported (taxation, charitable giving, litigation), a qualified appraisal is necessary. However, because the value of the business is crucial to any business insurance or estate planning analysis, business owners should be familiar with valuation approaches and methods.

Generally, an appraisal by a qualified appraiser should be used when a documented value is required for tax, financial and legal issues. Additionally, in the initial planning process where owners have no idea of the business value or when there is a significant difference between the owners with respect to that value, an initial appraisal should be obtained.

The valuator should be qualified with appropriate credentials and experience for the specific valuation purpose. A valuation opinion should be well reasoned, based on the methodology recognized by the courts and the Internal Revenue Service and used by valuation experts for the specific purpose of valuation.

Learn more by contacting a Financial Professional