What You Need to Get Your Business Valued
Once you have engaged a business appraiser, it is time to organize the various documents that will be needed to complete the business appraisal. The specific items needed for a business appraisal differ from one assignment to the next but here is a “laundry list” of typically needed documents:
· Tax returns, typically covering a three to five year period, for the business.
· Other profit and loss statements or financial statements which provide additional information or cover a
time period not provided in a tax return.
· Documents related to the incorporation of the business, tax identification numbers, etc.
· Partnership agreements and any buy/sell agreements.
· Information regarding any copyrights, patents or domain names owned by the business.
· Information regarding any pending litigation that the company may be involved in.
· Copies of any pending matters dealing with the IRS, state or other taxing authorities.
· An organizational chart with key personnel and their responsibilities along with any employment or
independent contractor agreements.
· Copies of any contractual agreements with outside firms such as supplier agreements.
· Information pertaining to real estate owned or leased by the business: deeds, leases, real estate appraisals, etc.
· Documentation pertaining to machinery, equipment, furnishings, fixtures, etc. owned by the business
including any prior appraisals of such items, for example, by machinery and equipment appraisers.
· Documentation related to the value of any inventory or supplies owned by the business on the valuation
date or dates.
· Franchise or similar agreements if applicable.
It is important to speak with the business appraiser and/or your attorney or other advisors regarding your particular situation as the necessary documentation can vary widely from one business appraisal assignment to another.
Make copies of all of the information that you provide to the business appraiser and be prepared for additional documentation requests once he/she has reviewed your case.
The business appraiser will generally interview the client at his/her place of business on at least one occasion.
Prepare as well as you can at the beginning of the assignment. Depending on your particular situation it might be wise to consult with your partner, attorney, accountant, etc. and seek their input. Again, depending on the particulars, it may be wise to notify some of these parties or key employees as to the fact that you are having the business appraised to alleviate their concerns and prevent problems or possible defections. Other times, (for example, if you were discretely looking to offer the business for sale), it might be wise to withhold full disclosure to key employees until you have made up your mind. It is not uncommon for that business appraiser to be portrayed as an “insurance man” when he goes to the place of business on that initial visit!
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· Understanding Business Appraisal Home
· Getting Started With Business Appraisal
· What You Need to Get Your Business Valued
· Choosing a Business Appraiser
· How are Business Appraisers Licensed and Regulated?
· What are the Professional Designations for Business Appraisers?
· What Does a Business Appraisal Cost?
· Definitions and Glossary of Business Appraisal Terms
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