The annual business valuation may seem like nothing more than a way for the owners of enterprises to feel good about themselves, but the process is not merely a procedure to prove to oneself how much success you’ve seen over the past year. Such services provided by the likes of SparDATA and other business appraisers can do far more than simply make entrepreneurs feel good about themselves.

In addition to providing you with an objective analysis of your business’s worth, an appraisal can assist in the following:

Taxes: In the event of an IRS audit on your business, a recent business appraisal can be the proof you need to prove your case. Being able to hand Uncle Sam a detailed description of your business’s earnings and overall worth will go a long way in the eyes of the tax man.

Mergers and Acquisitions: If your business is about to be bought or merged with another company, an appraisal from an outside entity can help your side during negotiations. Otherwise, you could be tricked into thinking your half is worth less.

Divorce Proceedings: When it comes to a messy divorce, money is invariably at the forefront of the courtroom back and forth. Having your business appraised keeps your former spouse from seeking slanted restitution, and helps the judge come to a fair and rightful ruling.

Estate Planning: The untimely death of a business owner can be devastating to the family in more ways than just the tragic loss itself. Without a definitive idea of how the business was performing, the surviving loved ones can easily allow themselves to be cheated during an acquisition or pushed around by the Internal Revenue Service. An annual business appraisal can bring peace of mind to those concerned about what would happen to their families in the event that they die unexpectedly.

Don’t shrug off a business appraisal as merely a way to pay someone else to tell you what you already know. Having an organization examine your business from the outside looking in will not only give you a fresh pair of eyeballs when analyzing your operations, but give you a useful tool you can use in several other situations.