Tip of The Day; Before You Pass the Torch, Find Out What Your Business Is Worth

Small-business owners invest blood, sweat and tears—not to mention time and money—into their companies. Putting a price tag on all that work may seem impossible. But in fact getting an accurate business valuation is essential to planning for your future, whether that means a succession plan, sale of your business or even your own retirement.

MassMutual recommends checking your company’s worth on a regular basis with a business valuation:

• A business valuation estimates the economic value of your interest in a business. It is usually used to determine the selling price, the amount needed to fund a buy-sell agreement, or to assign values to individual assets.
  
  
• Your business is probably your most valuable asset and will be an integral part of your retirement plan. It is critical to know how much of your business’ value will be available when you retire.
  
  
• If something unexpected happens to you or your business partner, it could burden your family with tax liabilities for your business. Getting a clear picture of the value of your business can help you prepare your estate plan and tax obligations.

Even though your business means the world to you, you also need to know its value to the rest of the planet. It could make or break your plans for the future.