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Verbal Valuations For Planning Purposes

"Knowing the value of your business is just good business. It is important to get a , since owners may grossly overestimate or underestimate the value of their business."  [1]

  

There is often an immediate need to retain an independent expert Chartered Business Valuator (CBV) to prepare a business valuation report.  Previously, I have disc...

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Growth – What To Do When It Flat Lines

Growth is a key value driver for most businesses.  A good growth story with plans for future growth is very appealing to potential purchasers during the .  Many successful businesses, however, reach a point where their growth starts to slow as the company matures.

Demonstrating how a business is likely to grow in the future is one of the keys to d...

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Exit Planning Step 6 – Action Plan

"A goal without an action plan is a daydream."

               Nathaniel Branden, practicing psychotherapist, corporate consultant, and author

The final step in the involves creating the action plan for the...

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Exit Planning Step 5 – Net Proceeds Analysis

The exit plan is progressing.  We have identified the goals under Step 1, determined the financial needs upon exit under Step 2, assessed the under Step 3 and selected the relevant exit option(s) under Step 4.

The net proceeds analysis involves determining how much the business owner will "pocket" from the sale of the business after settling all li...

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Exit Planning Step 4 – The Exit Options

There are various exit options available to business owners.  The key to Step 4 of the is to identify which exit option will best accomplish the goals defined under Step 1.  The exit options generally fall under two categories: internal transfers and external transfers.

 

The internal exit option...

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The Value Enhancement Process – Step 2 of 2

In order to the key value drivers must be identified.  Determining the key value drivers requires an assessment of each value driver’s relevance and impact in affecting value.

Relevance - refers to how important the value driver is to increasing the quantum and/or quality of t...

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The Value Enhancement Process – Part 1 of 2

is a process that takes time, which is why it is vital for business owners to begin this exercise at least 3 to 5 years prior to an exit or sale of the business.

 

The value enhancement process consists of the following five steps:

 

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Exit Planning Step 3 – Business Valuation

The is now beginning to take shape.  The goals have been identified, including the anticipated timing of exit and the preference for either an internal transfer or an external sale to a third party.  The financial needs have been quantified, including how much is required from the sale of the business to achieve the financial goals.

 

Now...

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Exit Planning Step 2 – Financial Needs

Once the personal, financial and business have been clearly identified, the next step involves determining the business owner’s financial needs upon exit.  In other words, what lump-sum amount is required upon exiting the business (including from the sale of the business) to enable the business owner to achieve the goals defined under Step 1?

 

A certified financial planner (C...

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Exit Planning Step 1 – Defining Goals

An begins with a concise statement of the business owner’s personal, financial and business goals.  These provide the framework against which all exit planning decisions are made.

 

Each business is unique and each business owner will have his/her own personal, financial and business goals.  These unique goals will drive the creation of the exit plan.  There are, however,...

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