Tips for maximizing the value of your aviation business
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Key to the asset approach of valuing an aviation is business are the company's assets. Typically, the asset approach is used when a business is asset intensive, meaning that there are a lot of assets in the company, and usually these assets are integral to the operation of the business. Examples might include a firm that manufactures aircraft parts, a charter company that owns most of its aircraft fleet, or an FBO that owns the land it is on and the buildings out of which it operates.
There are many approaches that can be applied to valuing an aviation business. Which one, or what combination of approaches are best to determine the value of a specific company is dependent on a number of factors. All of the approaches to valuing a business fall into three general categories: asset, income and market approaches.
The final installment of our series on why you should know the value of your aviation business discusses using a valuation as a starting point for moving forward. You re-evaluate many aspects of your business from time to time; it's important to take a look at the whole business as well.
The third installment of our four-part series on why you should know the value of your aviation business takes a look at valuing your aviation business when there are changes in the ownership of the company. This can happen not only when a business is sold, but in many other situations. In some of these situations, the IRS requires a certified valuation.
While determining the value of your business is important if you are considering selling the business, there are many other reasons it can be both important and useful to know how much your business is worth. In the second in our four-part series, we discuss more reasons why you want to know the value of your aviation business.
When someone talks about having their business valued, the reason that typically tends to come to mind for most people is that the owner must be thinking of selling. Getting a valuation of an aviation business is definitely a great place to start if selling the business is the goal. A valuation provides an owner with a realistic understanding of what the business is worth in the current market. It also provides a good point to begin the discussion with a potential buyer.
But there are a lot more reasons to have a valuation done. Download our tip sheet with the first several reasons why you should know how much your aviation business is worth.
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More Worth It Wedne$day!s with tips on increasing the value of your aviation business are available in our Worth It Wedne$day! archive.