What to Expect During a Business Valuation (And Why It Matters)

Business owners usually have an idea of what they think their company is worth, but obtaining an actual valuation can be challenging. That’s a different story.

Whether you’re planning to sell, bring on investors, or just want a clearer picture of your financial standing, a business valuation can give you the answers you need. However, it’s not just about the final number; it’s about understanding how that number is constructed.

The Process Isn’t as Intimidating as It Sounds

Valuations start with gathering information. You’ll need a few years of financial statements, a list of assets, possibly some tax returns, and an understanding of how your business operates on a day-to-day basis.

Then comes the analysis. A CPA or valuation expert looks at your income, expenses, cash flow, liabilities, and growth potential. They also take into account your industry, competition, and economic conditions.

In short, it’s a mix of hard data and professional judgment.

The result isn’t just a number to hand to a buyer or bank. A valuation can show you where your business is strong and where it’s vulnerable. It can help you prepare for a transition, set goals, or identify ways to increase value over time.

At JTS Associates CPAs, we walk you through every step, using clear, straightforward language with no jargon or guesswork, so you gain insight into what your business is worth and why.

And yes, it’s worth knowing, even if you’re not selling tomorrow.