What You Need To Know About Small Business Appraisals
And What You Haven't Thought About
Gifting your children ownership in your business.
If you own a small business it might be a family operation. As the owner it’s likely that you have thought about the future of your company and if/who will continue the business on after you stop. Many people have “gifted” their children shares in their company. When you own a small business those “shares” are called membership interests which are measured more often by a percentage rather than an actual dollar. If you are hoping to stay under the federal gift tax while gifting your children their shares, having an appraisal makes it a much simpler process.
Selling Your Business
Before selling your business it’s important for a business owner to know how much their individual assets or approximately what their business is worth as a whole. Getting an appraisal will help you better understand your business to move forward. Whether you are just selling specific assets or your entire business, an appraisal will keep you informed as you make business decisions.
Planning For The Future – Establishing a Buy/Sell Agreement
As you begin to plan for the future of your company whether you plan to keep your business in the family or not, an appraisal can help! Especially if you have a partnership in the existing company, it’s smart to think about when one partner is no longer interested or able to be a part of the company. In many cases, the other partner will choose to buy the original partners share out. Many times the buy/sell agreement is put into place far in advance, it is written in the terms and conditions that the share will be sold on the condition that an appraisal is done, and the share is valued accordingly to that.
Making Large Financial Decisions
In order to properly make good business decisions it helps to know your business’ financial status. Especially in a small business setting, finances can change rapidly and staying in tune to the value of your assets can make a huge difference in your financial decisions.
We hope that these few points give you some food for thought as you think about why and how your business could benefit from an appraisal. No matter how small your business is, you can always benefit from staying informed and understanding the value of your business and assets.
Miedema appraisals serves a wide variety of industries including agricultural, commercial, construction, restaurant industries and more. To learn more about what we do, click here.
If you have questions regarding asset and business appraisals, please contact us today or call our customer service team at 616-878-3470 Monday through Friday 8AM – 5PM. Our team of individuals is happy to help you in any way that we can.