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Key Value Drivers – Size and Scalability

Size and scalability is a key value driver for most businesses.  Larger businesses are perceived to be more substantial and stable organizations than smaller companies.  These businesses have found a way to grow beyond the efforts of the owner(s) and become less reliant on the owner.

Investors consider smaller companies to be riskier than larger o...

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Exit Planning Can Save Significant Taxes

 

Maximizing the net proceeds received from the is a common goal for many business owners.  This will only be accomplished with enough time to implement an effective strategy for maximizing value and minimizing taxes.

Business owners generally are aware of the $750,000 capital gains exemption that is ...

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Key Value Drivers – Economic Dependence

Developing a business that is not economically dependent on a single customer, supplier or employee is a key value driver for many businesses.  Economic dependence increases business risk and decreases .

Potential purchasers of a business are interested in the extent to which: i) sales are derived from one customer; ii) raw materials are obtained fr...

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Periodic Valuations Help Avoid Costly Legal Disputes

Relationships can break down over time.  Many of us have experienced this with a friend, spouse or business partner.   are among the most contentious and frequent types of business disputes.  In addition, over 40% of marriages will end in divorce before the 50th year of marriage. [1]

Conflicts between sh...

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Key Value Drivers – Over Reliance on the Owner

Developing a business that is less reliant on the owner is a key value driver for many businesses.  Purchasers are very interested in assessing the extent to which sales will continue and the business will carry on under new ownership. also plays a key role in this equation.

If sales are generated by the owner’s personal skills, abilities, contac...

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Key Value Drivers – The Hierarchy of Recurring Revenue

The customer base is a key value driver for most businesses.  In addition to a diversified client base and the potential for future revenue growth, purchasers are very interested in companies that have strong customer relationships that lead to repeat business.

The extent to which future sales can ...

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Exit Planning – The Difference Between Value and Price

 

Some would argue that a business valuation is not useful to business owners for because the valuation can become outdated quickly and it may not provide an accurate assessment of what a potential purchaser would be willing to pay for the company.

Although I generally agree with this reasoning, I beli...

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Exit Planning – Consequences of Not Planning Can Be Severe

According to a 2008 White Horse Advisors' survey of closely-held business owners, 96% percent of Baby Boomer business owners agreed that having an exit strategy was important, but 87% did not have a written exit plan. [1]

The consequences of not having an can include, among other things, lost opportunity, wasted time, effort & money as well as decreased business value.  These conseq...

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Exit Planning – Ingredients For An Effective Strategic Planning Session

Step 6 of the (Action Plan) begins with assembling the key individuals for a strategic planning session.  These individuals could include the business owner(s), the family, management and professional advisor(s).

The objective of the initial strategic planning session is to identify at least 10 different strategies that will ...

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Not All Valuation Reports Are Created Equal

The quality of a depends upon the reasonableness of the underlying assumptions made by the valuator.  The valuator’s judgment (or lack thereof) in assessing and supporting the reasonableness of the underlying assumptions can have a significant impact on the reasonableness of the overall valuation conclusions.

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