In order for a company to keep improving, business valuation is an essential ingredient. Let’s focus on why business valuation is important to perform due to these reasons.

1. For Litigation – If there is a court case related to divorce, injuries related to the value of a business, it is important to provide the company’s worth as a proof. The proof is to make the company prove that it is worth taking care of the business.
2. For Planning Exit Strategy – If your plan is to sell your business, then it is important to come with the base value of your company. Doing so is a great way to improve the profit of your company during an exit strategy. Moreover, doing business valuation also helps your business to be ready during unexpected times.
3. For Buying a Business – There are many buyers who want to buy a business from different sellers. In order to understand the true value of the company, doing business valuation will help you to understand the true value about the company. Business valuation comprises of understanding various factors like potential income, market conditions etc, before purchase of business is done.
4. For Selling a Business – At the time of selling a business, it is important to receive valuable income. Doing so will help the purchasers to offer an attractive price for your business at the time of selling.   
5. For Funding – Funding with the help of business valuation is a great way to negotiate with banks or other investors. Doing so will increase the credibility about your business.

These are a few reasons behind the need of business valuations.