Certified aviation business valuations & appraisals by Avicor Aviation

Reasons to Value My Aviation Business: Part IV

✈ May 3, 2017, Avicor Aviation Inc.

Summary of Reasons

In the first three posts of our four-week series on reasons for knowing the value of your aviation business we have discussed six major reasons. To summarize:

  1. A valuation allows you to set a realistic asking price if you are going to sell your business.
  2. Valuing your aviation business allows for better corporate and personal planning.
  3. Many bankers and financiers don't really understand the dynamics of the aviation industry. A valuation of your business can make it easier for them to understand.
  4. The ability to compare your business with others in the industry can be a great benefit of having a valuation of your aviation business.
  5. Reviewing the worth of the business can pinpoint areas in the business that can be improved to increase value.
  6. Valuing the business is necessary when partners or owners are added or removed from the business.
  7. A certified valuation is required by the IRS when the business or shares of the business are gifted.

In the last of our series reasons you should know what your aviation business is worth, we are focusing on one key reason.

Reason 8: Solid Starting Point

As you go along operating your business, things change over time. Sometimes its the focus of your product or service offerings. Sometimes its the way you do things. Sometimes there is expansion. Sometimes there is contraction. In any case, no business is exactly the same now as it was a year, two years, or five years ago. Maybe you have never really taken a look at the value of the business.

A valuation looks at the business as a whole. It is a review not only of the financial statements, but also at less obvious factors such as your client base, the value of strategic relationships, the value of key personnel in your company, relationships with the FAA and local authorities, certifications, and a lot of other elements of the business that can add value. Sometimes there is synergistic value. Sometimes your location can be a key factor. The value of a business can consider a lot more than the hard numbers.

When you know how much the business is worth today, it allows you to set achievable goals for where you want your company to be in three, five, ten years. Once those goals are determined, strategies for getting there can be developed. Periodically updating the valuation will able you to measure your growth and catch any areas that need attention.

Knowing the value of your aviation business makes it possible to think ahead and plan out your future more effectively, but as we have discussed over the past few weeks, there are many other good reasons to know the value of your company.


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