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Putting a Value on a Family Business

Many residents of Dayton, Ohio, and the surrounding area own small businesses that may have been in their families for years or even generations. Often, when people get married, both spouses participate in the family business, and they may even both own shares in the enterprise.

While it is always a good idea for people to know how to put a value on their business, as it can become necessary to sell it, take a loan, or the like at any time, valuing the business is particularly important during a divorce or separation. This is because if the business is marital property, a couple's interest in that business will have to divided fairly as part of the property division process.

There are a number of techniques a person can use to estimate the value of his or her family business. These techniques of course assume that the business is not publicly traded and has not recently been bought or, on the other hand, is currently on the market for sale. These techniques are only estimates; the best way to get a precise value on a business is to work with one's family law attorney to identify an expert who can give an informed opinion on the business's market value.

The key to remember when deploying any valuation technique is that a business is worth more than all of its property less all of its debts. Really, the most valuable thing a business offers anyone is a steady flow of income, so one key to estimating the value is to accurately calculate how much income a business will reliably produce in the future.

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