What does business valuation mean for your divorce?

| Sep 22, 2018 | Uncategorized

Divorce will bring significant financial changes to people, particularly those who own small businesses. Any type of business could be a marital asset, which means that couples must address it in the divorce settlement. There are various ways to deal with a business during divorce, but an important aspect of this is an accurate business valuation.

The true value of a Florida business could have a significant impact on your divorce. Depending on your individual situation, it could be most prudent to sell or negotiate with your spouse for sole ownership of the business. Knowing how much your business is truly worth will help you make smart decisions regarding your financial future. 

Common methods of business valuation

It is not always easy to know how much a business is truly worth. In this process of coming to a specific number value, you must take into consideration things like business debts, future projected earnings, personnel and much more. This can be a very complex process, and many businesses find it beneficial to seek professional guidance as they work for a fair property division order.

If you are seeking an accurate valuation of your business, there are three approaches that you could use. The right option for you depends on the type of business you have and more. The three options include the following:

  • Earning value – This approach will consider the projections regarding how the business will earn money in the future.
  • Asset-based – This specific method considers all of the property owned by the company and whether or not it adds value to the business.
  • Market-value – This method compares the business to other similar ones in order to establish a fair market value.

Whether you want to sell your business after divorce or want to protect your interests in the company, knowing what it is truly worth can help you fight for a reasonable outcome.

Divorce does not mean the end of your business 

Your marriage may be over, but that does not necessarily mean your business will be over as well. It can be helpful to speak with a legal professional about your needs and goals for the future in order to pursue the right type of property division order.

Divorce can be a complex process, particularly for business owners, but it is smart to take steps to protect your business and financial interests from the very beginning of the divorce process.

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