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Whether you're selling your business, planning for succession, resolving a dispute or seeking investment, being well prepared can make the business valuation process more efficient and accurate.
A business valuation provides an independent estimate of what a business is worth at a particular point in time. For family law matters, an accurate valuation can help establish the value of a business interest and support informed negotiations or court proceedings.
The valuation process considers the financial position, performance and future prospects of the business, as well as the market and industry in which it operates.
Preparing the right information in advance can help your valuer complete the assessment efficiently and reduce the need for additional requests.
How to prepare for a business valuation?
Preparing for a business valuation involves gathering accurate financial, operational and legal information. The more complete the information provided, the more efficient the valuation process is likely to be.
This guide outlines the key financial information, business documents and operational details a professional valuer will typically require, helping you understand what to expect and how to prepare before your valuation begins.
Business valuation checklist
Providing complete and reliable information helps your valuer understand how the business operates, identify relevant risks and determine its maintainable earnings and future prospects.
Financial information
You should generally prepare:
- Financial statements and tax returns for the past three financial years
- Current year-to-date management accounts
- Budgets and financial forecasts
- Details of loans and other financing arrangements
- Independent valuations for property, plant or equipment, where available
Business and legal documents
Your valuer may also require:
- The lease for the business premises, including renewal options and property details
- Key customer and supplier contracts
- The company constitution, trust deed or partnership agreement
- Shareholders agreements and other ownership documents
- Information about competitors and wider industry conditions
Revenue and expense information
Revenue and expense information helps the valuer understand the underlying profitability of the business and identify any unusual or one-off transactions that may affect the valuation.
For the past three financial years and the current year to date, you should also provide:
- An analysis of sales by customer, product, service or revenue stream
- A breakdown of remuneration paid to business owners and associates, including superannuation
- Details of private or personal expenditure included in the profit and loss statement
- Explanations for significant fluctuations in revenue or expenses
- Details of one-off, unusual or non-recurring income and expenses
Whether you're preparing for a business sale, succession planning, family law proceedings or another commercial matter, RSM's valuation specialists can help you understand the information required and guide you through the valuation process.re reliable assessment.
Why preparation matters?
Clear and complete information allows the valuer to distinguish between the underlying performance of the business and temporary or unusual financial results. It can also help identify factors that may influence value, such as reliance on key customers, dependence on the owner, contractual commitments, business assets, future growth prospects and industry conditions.
Preparing your documentation before engaging a valuer also allows potential issues to be identified early. Missing financial information, outdated agreements or incomplete records can delay the valuation process and may affect the assumptions used during the assessment.
Investing time upfront helps create a smoother, more efficient valuation engagement.
Preparing early can help streamline the valuation process, reduce delays and support a more reliable assessment.
When might you need a business valuation?
A business valuation can support a wide range of commercial, legal and strategic decisions. Understanding what your business is worth can provide greater clarity when planning for the future, negotiating with other parties or managing a significant change.
You may need a business valuation when:
- selling or buying a business
- planning for succession or retirement
- transferring ownership to family members or employees
- bringing in or exiting a shareholder
- resolving a shareholder or partnership dispute
- dealing with a family law matter
- undertaking tax, estate or restructuring planning
- seeking investment or finance
- preparing for a merger, acquisition or business sale
The purpose of the valuation will influence the methodology used and the information required. Engaging a professional valuer early can help ensure the assessment is appropriate for your circumstances and supported by reliable financial and operational information.
Get in touch
Need help preparing for a business valuation?
Whether the valuation is required for a family law matter, ownership change, succession planning or another commercial purpose, our specialists can help you understand the information required and guide you through the process.
Contact your local RSM office or complete the enquiry form to speak with one of our specialists.
Need help preparing for a business valuation?
Whether the valuation is required for a family law matter, ownership change, succession planning or another commercial purpose, our specialists can help you understand the information required and guide you through the process.
Contact your local RSM office or complete the enquiry form to speak with one of our specialists.
