According to studies on , more than one third of those surveyed are expecting to sell their business externally to a third party. [1] "We should remember that good fortune often happens when opportunity meets with preparation." ― Thomas A. Edison Business owners looking to sell their business to an external third party should take note. There is tremendous opportunity to sell for a significant premium because many business owners are not properly preparing. The prepara...
An is a critical element of pre-sale planning for business owners. Various studies indicate that between 60% and 75% of business owners will exit their businesses within the coming decade. [1] Over $10 trillion in private wealth will change hands in North America over this time frame, the largest transfer of private wealth in history. [2] There certainly is capital out there currently sidelined and looking for good investment opportunities. If you have an attractive and salable business, ...
The ultimate test to determine if you or just have a “job” can be found in a simple question: would someone want to buy your company? Would your customers continue to do business with the company (and its new owners) after you are gone? In other words, will the revenues and discretionary cash flows generated by the business continue after your departure? This is a major issue for many smaller personal services businesses that have few, if any, employees and are very dependent on the owne...
A sobering statistic for many is that over 40% of marriages will end in divorce before the 50th year of marriage. [1] This does not exclude business owners and a matrimonial separation can result in significant professional fees for business owners, especially when the . An independent business valuation can help to minimize legal and expert fees for business owners going through a matrimonial separation. The division of property is a major issue in a matrimonial separation. According to the ...
Business ownership can be complicated, particularly when there are multiple shareholders. The odds of over various issues can be very high. When shareholder relationships break down there must be a mechanism in place for dealing with the dispute or for enabling one or more of the shareholders to exit the business in a pre-determined manner. A shareholder buyout can quickly turn into a costly dispute if the value of the business has never been discussed and agreed to among the shareholders. D...
As a business owner, . According to a publication by Mercer Capital: "About 75% of all private equity is owned by households for whom it constitutes at least half of their total net worth. Households with entrepreneurial equity invest on average more than 70% of their private holdings in a single private company in which they have an active management interest." [1] Enhancing and managing this privately held business wealth is critical to business owners and this process begins wi...
Are you trying to build a business to one day sell for top dollar? If so, it is critical for you to manage your value expectations and to be aware of how your business will be perceived and valued by potential purchasers. Many business owners have unreasonable expectations regarding the value of their business. According to RBC Business Succession Planning: Your Essential Roadmap, "It is important to get a , since owners may grossly overestimate or underestimate the value of their business." ...
Facebook’s recent acquisition of WhatsApp for $19 billion represented the largest-ever acquisition of an Internet messaging service company in history. WhatsApp allows users to avoid text-messaging charges by moving texts across the Internet instead of the mobile phone carrier networks. This can save people who travel, or live in emerging markets, hundreds of dollars a year. As a result, WhatsApp is adding about one million new users per day. At the time of the acquisition in February 20...
Many business owners do not know the , which can represent a significant portion of their overall wealth. Worse yet, many business owners will grossly overestimate or underestimate the value of their business. A Chartered Business Valuator (CBV) or Accredited Senior Appraiser (ASA) can provide you with this extremely valuable information. Some business owners are reluctant to undertake this exercise because of the cost. They do not appreciate that the benefits of obtaining an independent valu...
VSP to Make Guest Appearance on Exit Coach Radio At VSP we are committed to helping . As a certified exit planning advisor with professional business valuation designations in Canada and the United States, I believe that having realistic expectations with respect to how a potential purchaser would value your business and knowing how to enhance the value of your business before exit is critical to ensuring a smooth transition to new ownership. Proper planning, including obtaining an indepen...