Lee R. Schroeder is an Ohio licensed attorney with Schroeder Law LLC in Ottawa. He limits his practice to business, real estate, estate planning and agriculture issues in northwest Ohio. He can be reached at [email protected] or at (419) 523-5523. This article is not intended to serve as legal advice, and specific advice should be sought from the licensed attorney of your choice based upon the specific facts and circumstances that you face.
While there are many ways to value a business, three approaches to business valuation are commonly used. The “asset approach,” the “income approach” and the “market approach” are the three most common approaches when it comes to business valuation.
Business valuation can be crucial in the context of divorce, tax-planning, succession planning and sales and purchases of businesses. There are numerous, legitimate ways to value a business. However, there are three approaches to business valuation that are most commonly used, either purely or with some variation.
Certain valuation approaches are more or less common depending upon the type of business being valued (manufacturing, retail, service, etc.). Certain approaches are more or less common based upon the purpose for the valuation (divorce, succession planning, tax planning, etc.).
Read Lee’s full article on business valuation in the Lima News here: Legal-Ease: Valuing a business