It has often been said that valuing companies is an art, not a science. When a buyer considers the purchase of a company, three main things are almost always considered when arriving at an offering price. Quality of the Earnings Some accountants and intermediaries are very aggressive when adding back, for example, what might be considered one-time or non-recurring expenses. A non-recurring expense could be: meeting some new governmental guidelines, paying for a major lawsuit, or adding a new … [Read more...]
A Reasonable Price for Private Companies
February 23, 2015 by
Putting a price on privately-held companies is more complicated than placing a value or price on a publicly-held one. For one thing, many privately-held businesses do not have audited financial statements; these statements are very expensive and not required. Public companies also have to reveal a lot more about their financial issues and other information than the privately-held ones. This makes digging out information for a privately-held company difficult for a prospective purchaser. So, a … [Read more...]
Top Ten Mistakes Made By Sellers
February 12, 2015 by
Neglecting the day-to-day running of their business with the reasoning that it will sell tomorrow. Starting off with too high a price with the assumption the price can always be reduced. Assuming that confidentiality is a given. Failing to plan ahead to sell / deciding to sell impulsively. Expecting that the buyers will only want to see last year's P&L. Negotiating with only one buyer at a time and letting any other potential buyers wait their turn. Having to reduce the price because the … [Read more...]
CABI President’s Message – February 9, 2015
February 9, 2015 by
By Dennis Smith, CPA CExP CVA CBI CABI President and Board Member President's Message For those of you who made it to the CABI 2015 Annual Meeting on January 21, THANK YOU for coming and making our meeting a success! Choose where you would like to get more involved and make a difference: For Colorado Businesses, for CABI, and For You! As your new CABI President for 2015, let me share this: We have an exciting year ahead for us! CABI PLANS FOR 2015 AND BEYONDBroker Education + … [Read more...]
Why Sell Your Company?
February 1, 2015 by
Selling one's business can be a traumatic and emotional event. In fact, “seller's remorse” is one of the major reasons that deals don't close. The business may have been in the family for generations. The owner may have built it from scratch or bought it and made it very successful. However, there are times when selling is the best course to take. Here are a few of them. Burnout – This is a major reason, according to industry experts, why owners consider selling their business. The long hours … [Read more...]
CABI Brokers Honored By Pratt’s Stats
January 27, 2015 by
Pratt's Stats, the leading private company merger and acquisition (M&A) transaction database, announced that four CABI Brokers were honored as the overall 2014 Hall of Fame contributors. Congratulations to the following Brokers and their firms: Paul ChamblissFront Range Business, Inc. Ron ChernakThe FBB Group, Ltd. Jim DeShayesColorado Business Exchange Mark DoranChoice Business Opportunities, Ltd. See the complete Pratt's Stats Hall of … [Read more...]
Who Is the Buyer?
January 12, 2015 by
Buyers buy a business for many of the same reasons that sellers sell businesses. It is important that the buyer is as serious as the seller when it comes time to purchase a business. If the buyer is not serious, the sale will never close. Here are just a few of the reasons that buyers buy businesses: Laid-off, fired, being transferred (or about to be any of them) Early retirement (forced or not) Job dissatisfaction Desire for more control over their lives Desire to do their own thing A Buyer … [Read more...]
Buying (or Selling) a Business
January 8, 2015 by
The following is some basic information for anyone considering purchasing a business. Is may also be of interest to anyone thinking of selling their business. The more information and knowledge both sides have about buying and selling a business, the easier the process will become. A Buyer Profile Here is a look at the make-up of the average individual buyer looking to replace a lost job or wanting to get out of an uncomfortable job situation. The chances are he is a male (however, more women … [Read more...]
Colorado Firms Make Pratt’s Stats Hall Of Fame
October 10, 2014 by
Pratt's Stats, the leading private company merger and acquisition (M&A) transaction database, announced its 2014 Q3 Hall of Fame contributors and named 4 Colorado business brokerage firms, who are also CABI Members. Congratulations to the following firms: Broker Name Firm Name Firm Location Paul Chambliss Front Range Business, Inc. Boulder, CO Ronald Chernak First Business Brokers, Ltd. Colorado Springs, CO Jim DeShayes Colorado Business Exchange Fort Collins, … [Read more...]
The Deal Is Almost Done — Or Is It?
October 8, 2014 by
The Letter of Intent has been signed by both buyer and seller and everything seems to be moving along just fine. It would seem that the deal is almost done. However, the due diligence process must now be completed. Due diligence is the process in which the buyer really decides to go forward with the deal, or, depending on what is discovered, to renegotiate the price – or even to withdraw from the deal. So, the deal may seem to be almost done, but it really isn't – yet! It is important that both … [Read more...]
