Business valuation is pretty important for people who are trying to determine how much their business and its assets are worth. There are many reasons why someone would want to do this such as they are expanding their company, or even they might be selling their business and want to see approximately how much it is with business valuation. Trinity business owners should be aware while there are many attributes of a company that can increase its value, there are also aspects of owning a business that can potentially decrease its value as well. There are some business tactics that might hurt the overall estimated value of your company.

Taking out Too Much Cash

Some businesses do much better handling in small denominations of cash, such as a restaurant as opposed to a car dealership that deal with large amounts. Some say that a business should do this because you do not have to declare cash on taxes, but apart from having legal implications, it can also bring down the estimated value of a business valuation. Trinity residents should be aware that less money you claim at the end of the year on taxes suggests that your business is not making that many gains, which could devalue your business.

Hiring Family Members at Your Business

Initially it is not a bad idea to hire a family member for your business because they can often do more work than a regular employee for the price. Yet if you are a well-established company and you are caught cutting corners to save a bit of money wherever you can, it can lower the estimate in a business valuation. Trinity business owners should not be discouraged for hiring family members from their business, as long as they are treated like regular employees with comparable wages.

*Disclaimer: The views expressed here are those of the authors and do not necessarily represent or reflect the views of Suncoast CPA Group*