Every smart business person knows the importance of being able to present a fair and accurate accounting of his business's value. It is particularly important when attempting to sell a business. This valuation document is the single most useful piece of financial information about any business. It has many purposes and can be used to:

• Prove the Fair Market Value of your business
• Provide Information to lending institutions for a business loan
• Validate information for a Merger, Acquisition or Stock Offering
• Create a succession plan or a trust
• Develop an estate plan or tax plan to protect wealth
• Determine the value of assets and liabilities
• Create an Employee Stock Ownership Plan (ESOP)

To know why it's so important to have a business valuation, you must understand that the book value reflected on the financial statements of a business usually differs vastly from the true market value.

Without a new valuation, a business owner must be prepared to defend his opinion of value. For instance, any potential buyer will place little credibility in a value arrived at by an owner's accountant. Therefore, a properly prepared valuation report by a valuation expert would become the best tool usable to obtain the maximum selling price.