How Small Businesses Can Easily Prevent Under-Budgeting
Apr 12 2016
In the United States today, there are roughly 26.5 million businesses in operation. That’s quite a lot — if America operated under a “one business per person” model, then one out of every 10 people would be a business owner. While that isn’t quite the case, it isn’t very far off.
Each month in the United States, around a half million business start up. While that seems like a very impressive rate of growth, it isn’t. At present, more businesses close down each month than open up, which represents a growing problem (or at least a shift) in our economy.
Around seven out of every 10 employer firms hit the two-year mark and beyond. Only half of those businesses will stay up for five years or more, and a respectable third of them will remain in business for 10 years. Respectable still, a quarter of businesses will be open for 15 or more years. So, the news isn’t all bad for our workforce.
Many businesses shut down solely because they mismanage their finances. Many don’t know what their exact, or even approximate worth is, and they make decisions with their budgets that are simply not sustainable. Many times, a business fails simply because it doesn’t “know enough about itself.”
This trend of businesses closing down before they’re able to flourish could partially be avoided by having a business appraisal valuation. Small business valuations are one of the more accurate assessments of a business’s worth available in the marketplace today.
When undergoing a business valuation analysis, it’s common to submit a wide array of necessary documents to the business valuation firm that will be providing your organization with its reporting. Financial statements, invoices, etc. — they allow the firm to get an accurate picture of what your organization is worth.
If you or any other business owners that you are familiar with can stand to benefit from any of the information above, feel free to share it. A business valuation analysis can help get a lot of business proprietors out of hot water by providing them with the information they need to plan their budgets intelligently.