When we talk about the importance of valuing a companyIn this way, we are talking about a crucial element for any type of business. With this practice, the real amount of what it is worth is known directly.
Many companies have to make the difficult decision to sell all their shares, assets and facilities, due to various negative factors that lead to such a maneuver. However, sell a company is not like selling a house, a vehicle or something personal... To do so requires a proper valorization for it.
The importance of valuing a company is to be able to establish measurable objectives in the company. It is the most complete and widely accepted indicator in finance, to be able to create value in a business.
Thanks to a valorization of companies If it is effective, its true value can be determined and it can be sold at the best possible price.
What are the reasons for valuing companies?
Normally, a business must perform aa company valuation annually, in order to know what its real value is, its difference with other competitors and to adapt to changes in current currencies.
The valuation of companies allows the value of the business to be adjusted to inflationary changes or socioeconomic policies dictated by governmental entities, however, it is not totally mandatory. In fact, most companies do not carry out a valuation of their business. company valuation until the right time, which is usually when it is about to be sold to a buyer.
It is here that a new valuation of companies. Otherwise, the entire business could be sold for a value that is not even close to its real value. As a result, the seller would be losing, while the buyer would be receiving a very good profit.
A correct valuation of companies minimizes any kind of margin of error and allows the price to be fair to both parties, being high enough for the seller and economical enough for the buyer.
It should be noted that the final price will be part of the negotiation between the buyer and the seller, where it will be determined if it is the most suitable for both parties. The importance of valuing a company This is precisely because it will help to determine the amount at which the company should really be sold.
Having said that, there are different scenarios where the valorization of companies in any business. Let's take a look at some of them:
Value creation
Creating value is essential for any type of company, since it allows you to know how important it is, how much it costs and how relevant it is in the market.
It is impossible to talk about the importance of valuing a company not to mention the value creation it generates, expanding the possibilities of selling at a much higher price than originally thought.
Making decisions about the continuity of a company
If a company is not in its best moment, it is probably about to sell all its belongings. Generally in the life of a company, decisions about its continuity are made and there may be mergers, spin-offs, dissolution, among other actions presented by the same problem.
If there is no valorization of companies implemented, it is not possible to determine the best decision regarding the continuity of a company, limiting its possibilities for a better future.
Company purchase and sale transactions
This is possibly the most important reason why you should have a valorization of companiesThis allows us to know the ideal price at which both parties, buyer and seller, will be winners.
The valorization of companies provides the ideal amount to achieve an efficient transaction, always giving the seller the minimum price at which the company will be sold, while indicating the maximum price to be paid for the company to the buyer.
Inheritance and probate proceedings
With a valorization of companies The appropriate, it will allow to distribute equally each of the corresponding portions of the company to the members who are in a will or by inheritance.
At the same time, this process helps to compare the value of each member's shares with respect to other assets.
Creation of a strategic plan
Apply a valorization of companiesThe new system, gives the possibility to create a great diversity of strategic plans to study and respond to any type of impact present in the business.
The reason for this is very simple: through a valorization of companies can be analyzed and value created through constant research, thus minimizing the likelihood of a negative scenario.
What are the benefits of valuing a company?
The main reason why you should make a valorization of companies is to know the current value of the company: to know how much it differs in terms of value with respect to others in the market.
To know the position of a company is essential for their development, growth and evolution. You will need to have all the necessary tools to achieve the right way the valorization of companies.
Among the main benefits that stand out are importance of valuing a companyare:
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- Know the exact price of what the company is worth. Whether the company is to be sold or you simply want to know where it stands in relation to others, a company valuation will help you determine the exact amount.
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- Sell your company at the highest possible price. In the event that the company has to be sold, the selling price is guaranteed to be the maximum possible price for the sale.
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- Opens up possibilities for continuation. If it is decided not to sell the company, the valorization of companies allows to learn about other possibilities that benefit the company, opening the way to new and potential projects that had not been previously considered.
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- To get to know the company even better. In the life of every entrepreneur, sometimes they are unable to know the state of health of the company, thanks to the valorization of companiesThe company's brand value in today's marketplace can be determined.
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- It allows to know if it is at risk of bankruptcy or not. With a correct valorization of companiesIn this way, it is possible to determine whether a company is in danger of bankruptcy or whether it still has the possibility of taking another path that will allow it to continue to exist.
The importance of valuing a company is such that it is recommended to carry it out at least once a year, and learn more about the current situation of the organization and its presence in the market.
Who performs the valuation of companies?
Who performs this valorization of companiesis usually the expert in corporate financial advisory services. It can be someone in-house with knowledge on this subject or simply with the help of a Financial Advisory.
What are the functions of a financial advisor?
The function of a financial advisor and its link to the importance of valuing a company is to generate confidence as a financial consultant, to reduce any type of risk when carrying out transactions, investments, buying and selling, among others.
The market is a great source full of opportunities, every day the market grows, evolves and develops in a way that we had not seen before.
Whether you need to make a short-term financial plan or a forward-looking approach, you will need the help of a financial advisory to address these objectives in a coherent, precise and detailed manner.
Among some of the functions of a financial advisorThe following are the most important ones:
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- To have accounting support: Having structured accounting is highly important and indispensable, since it guarantees any business viability. In addition, it allows to implement actions, changes or decisions that may affect it in the short and long term.
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- Tax advice: Many times a financial advisor will not only be able to determine the best revenue streams or benefits for companies, sometimes financial advisors are also in charge of providing information about laws, regulations or legal aspects in general.
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- Personalized studies: A financial advisory allows you and your business a completely personalized treatment, to answer questions or comments and generate input, among other requirements from the company.
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- Strategic consulting: Thanks to its experience, the financial advisor is able to deliver accurate information, along with strategies and action plans for the future, which can be convenient for the company.
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- Time management and productivity savings: Because the company will not have to use its time to determine the best opportunities in terms of financing processes and/or valuation of the companythe financial advisory will be able to give you all these benefits without taking time away from the company.
How to successfully value a company?
At valoriza.com, you will be able to obtain the peace of mind you need by getting a valorization of companies fair and subject to precise and accurate calculations.
We invite you to contact us so that we can provide you with more help and information on the process of valorization of your company.
