Mary Beth Koester, a manager on Rea’s business valuation team, joins Dave to discuss professional service valuations and to debunk common valuation misconceptions. Episode 53, “dispelling the myths of business valuations,” provides listeners with key insight into the art of knowing the true value of a business practice and how that knowledge can help facilitate future growth. Practice valuations, according to Mary Beth, appear to be on the rise. And the reasons go beyond owners who are simply preparing for retirement or entrepreneurs considering selling for economic gain – although the aging Baby Boomer population certainly does contribute to the growing popularity of business valuations. These days, more and more business owners are realizing the overall value enhancement associated with knowing the value of their company or practice. They are finding out that having this knowledge helps facilitate better management decisions and greater process and operations considerations. The podcast goes on to highlight common “over valuation” assumptions business owners make regarding their own practices. This is due, says Mary Beth, to the entrepreneur’s emotional bond with the business and the way it operates. When an owner becomes wrapped up in the day-to-day operations of the company, by the time it comes to sell the business they have already invested their own “blood, sweat, and tears” into establishing and growing their company. The result is that they have a tendency to, like all humans who have formed an emotional attachment, over value its “market worth.” A buyer, on the other hand, will not pay a price determined by emotional value, which means, at the end of the day, your business is worth whatever a willing buyer will pay for it – nothing more, nothing less. This eye-opening episode of unsuitable on Rea Radio touches on: • What events generally trigger a business or practice valuation. • How a valuation can serve as an overall health assessment of the practice or business. • How a valuation can reveal additional, previously unconsidered opportunities. • The factors that ultimately determine the outcome of a valuation. • The general role of a business valuator and their impact on an owner’s business or practice. • The “must-have” criteria all businesses should be able to bring to the table prior to conducting a valuation. • The benefits of utilizing the “Know & Grow” concept as a way to increase business value and what that process entails. • Important considerations for business owners resulting from new IRS proposed regulations regarding estate planning and gifting, which may eliminate discounts used in valuation purposes for estates and gifting. Mary Beth gives listeners real world examples of valuation scenarios and important tips and advice for both novice buyers and veteran business owners. If you currently own your own business or practice, you are going to want to listen to this episode of the unsuitable podcast now. Like what you heard? Don’t miss out on the next one. Subscribe to unsuitable on Rea Radio on SoundCloud or iTunes. Then follow us with #ReaRadio on Facebook and Twitter for great behind the scenes features and visit our webpage at http://www.reacpa.com/podcast for some great articles and insight.