Is a formal business valuation needed for exit planning?

By Josh Patrick | Last updated: April 1, 2024

The short answer is no. You should find someone who has experience valuing businesses and can give you a thumbnail valuation for a variety of succession strategies. You should at the least get an approximate value for the value of your business to the following groups:

1. A sale to a family member.
2. A sale to your managers.
3. A sale to an outside buyer who is a financial buyer.
4. A sale to an outside buyer who is a strategic buyer.
5. The liquidation value of your business.

Knowing what these five valuations could be would provide you with useful information as you start thinking about leaving your business.


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Written by Josh Patrick

Josh Patrick
For the past 15 years Josh Patrick has owned and operated a wealth management business, Stage 2 Planning Partners, that focuses on the strategic issues faced by the owners of private businesses.

Mr. Patrick contributes to the New York Times You're the Boss blog and writes about creating value. He has also written for, Open Forum and various trade publications. His passion in life is helping private business owners create extraordinary value with their businesses and lives.

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