A business appraisal is an essential part of buying or selling a company, helping owners set a price and ensuring buyers get the best deal possible. However, this isn’t the only situation in which you may need an accurate calculation of your company’s value, including its cash flow, market share, and tangible assets. Below are some of the most common scenarios in which you may need an outside appraiser.

4 Situations That Call for a Business Appraisal

1. An Owner Is Departing

If an owner is leaving your company, the remaining owners will usually have to buy out their share. Typically, the buy-out price is based on the current value of the business and the size of the departing partner’s initial investment.

2. You’re Gifting Shares to Your Children

Giving shares of the business to your children while you’re alive can help them avoid paying estate tax after you’re gone. However, giving too much can trigger a gift tax, so you may need a business appraisal to calculate how much you can give every year without incurring a substantial penalty.

3. A New Owner Is Being Considered

There are a lot of reasons a new owner may want to join the ownership group.  It could be a valued employee or an outside investor that would provide new capital to expand into new markets, increase capacity, and take your business to the next level. Anyone becoming an owner will want to know the value of your business from a credentialed appraiser, which can help them decide whether they want to become an owner of your company.

4. Divorce

Like any other asset, your interest in the business may be subject to property division in a divorce. Because the value of a company is not always immediately apparent, the court may order a business appraisal to determine your spouse’s fair share.

If you’re interested in selling or buying a business in the near future, the professionals at Zoellner Garten & Company will guide you to a successful sale or acquisition. Since the company was founded in 1988, they have helped numerous buyers and sellers throughout Southwestern Ohio, Northern Kentucky, and across the United States to accomplish their dream of running a company. John W. Zoellner, President, is a Business Certified Appraiser and a Master Certified Machinery & Equipment Appraiser. Call (513) 852-2400 to speak with an advisor or visit them online to learn more about their business appraisal services.