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Importance of Business Valuations before Retirement

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Most business owners know that planning for retirement is crucial. However, according to Entrepreneur magazine, very few business owners are aware of the true value they have. Many have not taken the necessary steps to receive an accurate business valuation well before considering retiring. This makes it somewhat difficult to ensure they receive adequate value for their business to fund retirement, according to the article.

The article also cites surprising research conducted by Financial Planning Association, which found 78% of small business owners are planning to sell their businesses to fund between 60 to 100 percent of their retirement. In addition, a survey by Manta, which provides research and resources of small businesses, found the nearly 60% of business owners in the U.S. plan to retire before the age of 65, though 34% do not currently have a retirement plan in place.

These articles emphasize the importance of knowing the business’ actual value long before making plans to retire. A business valuation report can give the business owner an upper hand as they begin negotiations to transfer their business. An accurate business valuation also enables a business owner to make “realistic, well informed, and profitable decisions during every stage in the life cycle of their business.”

How can American Business Appraisers Help?

The aforementioned articles recommend business owners start taking steps early to ensure they know their business’ real value, long before considering retirement. With our initial consultation, there is no cost or obligation to you. We promise you two things; first, to invest a reasonable amount of time to gain an understanding of your specific requirements, and second, our communication will be kept confidential.

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