What’s your business worth to you? In abstract terms, it can mean the world. But knowing the actual value of your assets and equity is perhaps the simple most important factor in helping you plan for the future. Sure, an increase in assets typically means an increase in equity, but there are a few key reasons you should never be in the dark here.
- Know where you stand.
It’s time to start thinking of more than what the costs are to you. At some point, it’s very likely you’re going to have to answer to more than your current balance. The courts, agencies, investors, and clients you enter contracts with aren’t going to be impressed by an estimate.
Investors in particular like to anticipate what kind of impact their funds will have, as this can inform what kind of ROI they can expect.
An independent appraiser will help reveal your weaknesses, too. These are not aspects you want revealed when it counts, such as during a sale or at the behest of someone you’re entering a contract with.
- Make better decisions.
Buying and selling your business, as well as any associated equipment, is not an event anyone should enter into blindly. Just ask the pros at Equify – the market can prevent you from getting fair prices that work for your budget. You save money in all of the right areas when you know exactly where you should invest, and how much you should be willing to invest. This also applies to insurance, where coverage should be as cost-effective as possible, taking care of areas unique to your business.
It’s also way past time to start planning for your life beyond the business. If you ever plan on retiring, start getting regular appraisals now. Even if you’re not retiring, maybe you have a five-year plan to move on to another industry or company. If you want to get the absolute most upon exit, an accurate portrait of what you and your share of the business is worth is crucial.
- Monitor and foster growth.
My, how you’ve grown. However, you can’t really stake a claim as to how much growth you’ve enjoyed – and whether or not you can sustain that level of growth – unless you’ve had some appraisals along the way. Who knows; maybe the value of what you own is higher than you estimated. And when you’re ready to sell or net a new investor, those figures pertaining to growth are the absolute ace up your sleeve.
That aforementioned benefit where weakness are revealed matters here, too. Knowing which area of investment could optimize your rate of growth is the ultimate example of knowledge being equal to power. If you want to take your company higher, you have to know which areas are most likely to help you take flight.
Overall, appraising your equity gives you greater control. It’s the solid evidence backing every important decision and demand you make. In the end, it’s also the best tool for goal-setting. Get a clear, accurate picture of what your business is worth, and set your sights on increasing value every year from then on.
