The state of today’s economy makes it more important than ever to know an independent third-party’s value of your business.  Antiquated formulas and unsophisticated methods of the past may not result in accurate business valuations, whether it is for estate planning, buyout agreements, shareholder disputes, sale of a business, shareholder/marital disputes, or life insurance.  A company’s shareholders and/or management should seriously consider obtaining a valuation on a regular basis in the interest of avoiding a potential monetary quarrel with the IRS or fellow shareholders.

The most common method used to valuate middle-market businesses utilizes an estimated rate of return (ROR).  Investors typically require such businesses to go through an estimated ROR analysis in order to determine if a company is a viable investment.  A valuation provides an objective estimate of a company’s value based on a variety of qualitative and quantitative factors, which allows an investor to determine a fair rate of return...