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The Sellability Score is an extremely valuable pre-sale planning tool for business owners to help assess the current "sellability" of their business. 
 
In the fall of 2012, the Sellability Score researchers analyzed data from users over the p...

Does the company own assets that are not integral to the business operations or required to generate revenues?  If so, have these assets been appropriately reflected in the valuation of the business? Step 7 to reviewing a business valuation report involves identifying any redundant assets the business owns and ensuring they have been valued separately and added to the value of the business operations otherwise determined. Redundant assets are defined as tangible and identifiable intangible as...

Income tax considerations are vital to conducting a proper business valuation.  Step 8 to reviewing a business valuation report involves ensuring the value conclusion incorporates the relevant income tax considerations. The value of an operating business is dependent on its ability to generate discretionary after-tax cash flows.  In cases where business value is driven by the underlying asset values, such as real estate holding companies, important income tax considerations must als...

Does the valuation report provide sufficient reasoning and rationale to support its findings?  This is a key question to ask when reviewing a business valuation report given that business valuations are somewhat subjective in nature. Step 9 to reviewing a business valuation report involves assessing the reasonableness of the value conclusions, including the implied intangible value, and/or identifying what reasonableness testing the valuator used to support his/her findings.  Here are 6 reaso...

You have now completed your review of a business valuation report by considering:

  • The type of valuation report;
  • The author’s credentials and qualifications;
  • Any scope limitations underlying the conclusions;
  • The valuation approach(es) adopted;
  • The reasonableness of the projected cash flows or historical normalization items;
  • The reasonableness of the discount rate, capitalization rate or valuation multiplier;
  • ...

If your revenue starts to plateau after a period of rapid growth, you may have fallen into The Mile Wide Trap - not a good situation if you are looking to maximize the value of your business. To illustrate, consider a public relations (PR) firm started by an entrepreneur who originally spent ten years learning a variety of marketing disciplines (e.g. PR, advertising, direct marketing, social media, etc.) as an employee at a big advertising agency. Given her experience and connections, she qu...

If your business survives on the basis of being a distributor for one key supplier (i.e. selling another company’s product/service), it may be time to rethink your business model or, at the very least, rethink the way you view your business. When was the last time you used a travel agent, went to a CD store or rented a movie from the local blockbuster? Travel agencies have yielded to the rise of online travel booking companies. CD stores have succumbed to online music services such as iTune...

An independent business valuation is critical to your exit planning for many reasons. After identifying your goals and determining your financial needs, a current business valuation is t. Other independent sources also recognize the importance of a business valuation in exit planning: "At present, being able to measure the value of the business is a critical aspect of the business succession plan." CFIB Research, November 2012 "It is important to get a professional business valuation, since o...

A few weeks ago a friend of mine was telling me about a new exercise routine he had been following to help him lose weight and improve his overall health. It was visually apparent to me that he had achieved success with this new program. When he showed me his progression through weekly photos of himself, however, I immediately bought into his exercise routine as well as his commitment and motivation to its success. More recently, my brother sent me a current photo of himself and one from one mo...

Are you on track to meet your business goals for 2013? What are your goals for 2014? How often do you actually write down your goals for the coming year? I find that business owners generally do have predetermined revenue and/or profit targets. While those are important, there is another goal that can have an even bigger payoff: building a sellable business. You may say that you are not ready to sell. That’s not relevant. Here are five reasons why building a sellable business should ...