For some people, a closely held business is one of their most valuable assets. Unfortunately, many small business owners scratch their heads when asked how much their business is worth.

A valuation provides information for key decisions

• How much is our business worth and how can we make it more valuable?
• What type of financing is required to meet our goals? How much is required?
• How can we improve profitability?
• Do our financial statements reflect management’s operating philosophies?
• How do we safeguard our assets?
• How do we measure what matters?

Most small to mid-sized businesses hire a CPA for tax returns, compilations and audits. However, few business owners routinely request a business valuation. This situation is indeed a paradox, as a business valuation is one of the most valuable services a CPA can offer.

CPA service	When	Why
Tax return	Soon after year-end	To satisfy IRS requirements.
Compilation	Monthly, quarterly	To evaluate historical numbers.
Audit	Soon after year-end	To satisfy the requirement of creditors or the SEC.
Business valuation	Recommended every 3 years	To value an important asset. To get a vision for the future. To improve decision making. To assist in long-range plans. To understand what drives value.

A business valuation is a forward looking instrument that is an integral part of strategic and financial planning. A valuation is more than numbers; it is a stepping stone to opportunities. To better understand why we say a business valuation is more than numbers, visit our sample cases page.