Goodwill, or ‘blue sky,’ is probably the most misunderstood component of business valuation. Business owners are often curious about goodwill in their business and how it is valued, and they are also often confused.In their minds, the intangibles including renown of the business, the years of successful business operation, their client list, their trained staff,Read More…
This time of year many business owners spend an inordinate amount of time looking at their financial statements, especially related to tax planning for their business. Business owners are keen on using their financial statements to work on tax planning but fail to see how time spent on value planning can increase the value ofRead More…
January means it’s time for year-end financials, and as business owners everywhere are looking at revenues and profit numbers from the prior year, there is an abundance of insight hidden in the financial statements that many business owners are missing. What if you offered a unique conversation with the business owner that illustrates how theRead More…
Something notable happened with many business owners while managing through COVID that could impact the value of their businesses. It doesn’t have anything to do with their financials, and it doesn’t get much attention in the news. We’re talking about delegation. Many business owners responded to COVID by putting delegation of business operation decisions andRead More…
(based on actual client but details changed for privacy) We met recently with an experienced business owner to begin the process of valuing her business for purposes of transitioning her ownership. After our final meeting, as she prepared to leave she remarked that she enjoyed having a chance to look at her business from aRead More…
Nobody would argue 2020 has been an interesting year, but out of challenge can come opportunity. As we look back on the year, we thought it would be a good time for you to consider how you or your clients did on the list of value drivers we shared earlier this year in our 2-partRead More…
It can be tempting for business owners to focus on short-term gains versus taking the long-term view. However, the company is likely a business owner’s most valuable asset so it’s worthwhile knowing the drivers of value today so they can start to understand how every decision they make today impacts the future. Whether they want to sell in 1 year or 5+ years, the sooner they start the better because increasing value does not happen overnight.
Business valuation includes considering both quantitative performance and qualitative factors. Last month we suggested five qualitative drivers of business value to work on during COVID-19. Here are five additional qualitative factors for you and your team to consider: Value Lever #6 – Researching Alternative VendorsJust as reducing dependency on any one customer or key employee is wise, reducing dependency onRead More…
Last month we talked about finding opportunity in times of crisis, such as COVID-19. Before this pandemic struck, most business owners would admit it was difficult to find time to work on strategic planning for their business, including thinking about their business as an investment. When it comes to thinking about how to grow their businessRead More…
People like to think you can take some number off a company’s income statement, multiply it by some number between 3 and 7 and get a reliable conclusion of value for the business. While this DOES provide the answer to a mathematical equation, it does NOT provide the answer to “What is the value ofRead More…