Do you know the true value of your business?

George S. May International released outcomes of its survey, which showed that 58 percent of small business owners participating in the research don’t know their organization’s true value. 

The company surveyed 921 small business owners across the United States showed that most of them have not had a formal business valuation within the last year and do not plan on having one in the future, while 43 percent of them plan to sell their business within the next 10 years, and 22 percent later than 10 years. 

41 percent of respondents stated they thought a valuation should only be conducted upon the sale of the business, another 30 percent every three years, and 29 percent once a year. Paul Rauseo, managing director of the George S. May International Company supported the opinion of the last group. 

Assessing the value of a company, additionally to determining the price to pay or receive during the sale of a business, is also necessary 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, etc. 

The Value Management Solutions Group at George S. May recommended following five factors to be taken into consideration while valuing their business: Profitability of the Business; Asset Allocation & Protection; Operations Protection; Contingency Protection for Owner and Key Employees.