There are many benefits that come along with owning an operating your own business. At ACA Partners, we understand the stresses and rewards that come from nurturing an initial business idea into a full blown operation.

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Perhaps the biggest perk of having your own business is being able to reward yourself, along with other key persons in the company, such as upper-management executives, with generous pay. Executive compensation is a tremendous benefit that business owners can enjoy, relative to the type of company and stream of revenue that the business generates. It is also enjoyed by highly-qualified employees whose expertise and exceptional skills are essential to helping the company to run efficiently, thus contributing to improved bottom line.

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But any savvy company knows that coming up with executive compensation should not be an arbitrary exercise. There are considerable factors that go into computing executive compensation: industry rates, level of experience and skill, among others. And, of course, one of the most important factors is how financially capable the company is to provide that rate.

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Understanding how the company is doing over-all, not just financially, is the aim of a business valuation. It reviews beyond the usual financial documents and takes into account other factors that affect the company’s value. The actual business valuation is more complex than it sounds; it involves academically-validated methods with industry-specific valuation factors. Rather than trying to guess at these numbers, it’s highly recommended to employ the services of a professional body that specializes in business valuation.

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ACA Partners’ business valuation expertise is borne out of more than two decades of advising and deal-making experience in the buying and selling of businesses. With a professional business valuation in hand, determining your company’s executive compensation becomes a clearer and more rational process.