Business valuations are almost always difficult and often complex. A valuation is also frequently subject to the judgment of the person conducting it. In addition, the person conducting the valuation must assume that the information furnished to him or her is accurate. Here are some issues that must be considered when arriving at a value for the business: Product Diversity – Firms with just a single product or service are subject to a much greater risk than multiproduct firms. Customer … [Read more...]
Archives for April 2015
Considering Selling? Some Important Questions
April 22, 2015 by
Some years ago, when Ted Kennedy was running for president of the United States, a commentator asked him why he wanted to be president. Senator Kennedy stumbled through his answer, almost ending his presidential run. Business owners, when asked questions by potential buyers, need to be prepared to provide forthright answers without stumbling. Here are three questions that potential buyers will ask: Why do you want to sell the business? What should a new owner do to grow the business? What makes … [Read more...]
Is Your “Normalized” P&L Statement Normal?
April 16, 2015 by
Normalized Financial Statements – Statements that have been adjusted for items not representative of the current status of the business. Normalizing statements could include such adjustments as a non-recurring event, such as attorney fees expended in litigation. Another non-recurring event might be a plant closing or adjustments of abnormal depreciation. Sometimes, owner's compensation and benefits need to be restated to reflect a competitive market value. Privately held companies, when tax time … [Read more...]
Do You Have an Exit Plan?
April 8, 2015 by
“Exit strategies may allow you to get out before the bottom falls out of your industry. Well-planned exits allow you to get a better price for your business.” From: Selling Your Business by Russ Robb, published by Adams Media Corporation Whether you plan to sell... … [Read more...]
Member’s Corner – April 1, 2015
April 1, 2015 by
By Marsha Golgart AIBA, CMEA, CEPA, ISBA President / CEO Nationwide Valuations What Are the Main Factors That Impact the Value of a Business Interest?The value of a business interest is impacted by a number of factors, many of which may change from year to year. Factors that impact the value of a business include the following:Financial performance - If a business has poor earnings capacity or is on the verge of bankruptcy, the value of the business is going to be negatively impacted. If … [Read more...]
