- 17 percent said they will try to sell within one to two years
- 12 percent cited three to four years
- 14 percent cited five to 10 years
Meanwhile, 22 percent said they plan to sell later than 10 years, and 35 percent said they don’t plan on ever selling their business.
"Many people feel that the current economic conditions will inhibit them from selling, but that is not the case for most people that properly plan the sale of their business," said Paul Rauseo, managing director of the George S. May International Company. "The majority of our clients that go through a formal business valuation process are usually always off with what they ‘think’ is the true value of their business."
In the past, business valuations were good for two or three years, but with the current state of the economy, an update to a certified valuation should be made once year, according to Rauseo. Forty-one percent of respondents said they thought a valuation should only be conducted upon the sale of the business, while 30 percent said one should be done every three years, and 29 percent felt that one should be conducted once a year.
Business owners assess the value of their company, not just to determine the price to pay or receive during the sale of their business, but to resolve disputes related to estate and gift taxation, divorce litigation, mitigating loan stipulations, formulating the value of partners' ownership interest for buy-sell agreements, and many other business and legal purposes.
"Understanding the factors that determine the value of any business will pay tangible dividends by focusing on ways to increase short and long-term profitability," Rauseo said.
"Valuation methodology helps companies grow by showing if changes to assets or revenues are good or bad to the future value of the business. If your goal is to increase the value of the business, then having the means to measure your daily operations impact is essential towards that goal."
