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What’s your business really worth? It matters during a divorce.

On Behalf of | Aug 19, 2017 | Divorce

When a Colorado couple decides to move forward with a divorce, the process will involve the division of marital property and resolving other important issues, such as child custody. Property division is one the most hotly contested issues in a divorce, and this is particularly true for couples with an interest in valuable assets, such as a small business. 

When a small business is in question during a divorce, one of the most crucial steps is seeking a current, accurate valuation of that business. Appropriately valuing all important assets is the foundation of a fair property division settlement, and when your financial future is at stake, business valuation could be crucial.

How is the value of my business determined?

Determining the value of a business is about more than the value of the property the business sits on or the worth of the building itself. Factors such as the future growth of the business and profit expansion are important considerations when determining how much it is actually worth. There are various methods employed when trying to determine an accurate value for a business. Some of these include:

  • Reviewing financial statements
  • Looking at cash flow charts
  • Comparing with other similar companies
  • Considering plans for future expansion and growth

In some cases, it is necessary to employ the services of professional financial experts in order to accurately determine the value of your business. If the business is subject to division in your divorce, an accurate value could determine how much you get or what portion of the business interests will be yours.

Options for addressing your business

If the small business is profitable and currently in operation, any division of the business should not interfere with its stability and continued success. While dividing or fairly addressing these assets is a complex task, it is possible to do so through negotiations and discussions. In some cases, it is even possible to resolve these matters with an out-of-court settlement.

Your financial future

Any decision you make during divorce will have a direct impact on your future for years to come. Emotions should not drive your decision-making, but rather, you would be wise to have an awareness of what is best long-term. When it comes to getting your fair share of the family business, an accurate valuation of the asset, smart negotiations and a full grasp of your rights is important.