What is Your Mother of a Business Worth?

It’s important to note that any two licensed appraisers or prospective investors can read key valuation factors differently. But what is true to all business valuations is the attempt to put a dollar value on a company’s future business potential.   

Startup entrepreneurs and well-established business owners should have a sophisticated appreciation of how investors and ultimately business buyers will size up their company’s potential. Sometimes these factors which can influence company valuations are referred to as “business fundamentals” or “investment fundamentals.”

Here are six fundamentals that may influence the value of your business. (For full details, read the article in its entirety here).

No. 1: Revenue predictability.

No. 2: Customer list.

No. 3: High gross margin business.

No. 4: Intellectual property advantage.

No.5: Brand strength.

No. 6: Low debt load.

…an excerpt from “What’s Your Business Worth?” by Susan Schreter for the Small Business Center.

As featured on the Australian Businesswomens Network… Start with the End in Mind TODAY…

OK… so you’ve got through the festive season, and all went (or not).
Now it’s time to dream about the year to come, and what you want to do with your Mother of a Business. This link is as good a place as any to start… enjoy.

Good Luck!

Successfully passing on businesses is Vital…

“Given the Herculean effort that most people put into building their businesses, it’s amazing how many of them fail to plan their exit. Serendipity often rules, with many accepting apparently flattering or friendly offers without bothering to market their businesses.”

Seems there are a number of us now saying similar things…
This most accurate comment is from an article in the Telegraph in the UK.

Successfully passing on businesses – whether publicly traded or private – to the next generation of owner-managers and entrepreneurs is vital. Yet there has also been a surge in first-time founders of double-digit turnover companies selling out too early.

Good reading to be found here

Board Members that make absolute sense for Small Businesses…

Brendan Lewis, writing for Smart Company, raises very valid points in his latest piece “Killer Boards for Small Businesses“..

Forget accountants, marketers and lawyers, you can buy their services as you need. Forget industry doyens and professional directors, they are unlikely to be anything more than a distraction to a small growing business. What you want as a small business is additional directors that can help you with one or more of the following four tasks:

1. Grow revenues.
2. Raise capital.
3. Get the right people involved.
4. Exit the business.

If they can’t help you with one of the above tasks through their existing networks and assets, they’re just wasting your time.

Agreed!
Please pay attention… Being a nice person is great, but it cannot be the only basis for such important decision making.

Enjoy the rest of the article

The EXIT generation need HELP! indeed…

Don’t you just love it when the Press catch up with what you’ve been saying for some time now… Tony Featherstone has done just that in this fabulous summary on all things WHY you must start considering EXIT strategy and execution right now. Especially if you are as a BusinessOwner coming into the twilight of your care factor… Read on by clicking here

Would you consider this an Opportunity or a Threat to your business and / or that of your clients?

Could early preparation be a Strength?  Or a lack of action a Weakness?

Keep reading by clicking here

 

Success Is Easy, But So Is Neglect – Jim Rohn

Not a truer word spoken…

People often ask me how I became successful in that six-year period of time while many of the people I knew did not. The answer is simple: The things I found to be easy to do, they found to be easy not to do. I found it easy to set the goals that could change my life. They found it easy not to. I found it easy to read the books that could affect my thinking and my ideas. They found that easy not to. I found it easy to attend the classes and the seminars, and to get around other successful people. They said it probably really wouldn’t matter.

If I had to sum it up, I would say what I found to be easy to do, they found to be easy not to do.

Six years later, I’m a millionaire and they are all still blaming the economy, the government, and company policies, yet they neglected to do the basic, easy things.

In fact, the primary reason most people are not doing as well as they could and should, can be summed up in a single word: neglect.

It is not the lack of money – banks are full of money. It is not the lack of opportunity – America, and much of the free World, continues to offer the most unprecedented and abundant opportunities in the last six thousand years of recorded history.

It is not the lack of books – libraries are full of books – and they are free! It is not the schools – the classrooms are full of good teachers. We have plenty of ministers, leaders, counselors and advisors. Everything we would ever need to become rich and powerful and sophisticated is within our reach.

The major reason that so few take advantage of all that we have is simply neglect.

Neglect is like an infection. Left unchecked it will spread throughout our entire system of disciplines and eventually lead to a complete breakdown of a potentially joy-filled and prosperous human life.

Not doing the things we know we should do causes us to feel guilty and guilt leads to an erosion of self-confidence. As our self-confidence diminishes, so does the level of our activity. And as our activity diminishes, our results inevitably decline. And as our results suffer, our attitude begins to weaken. And as our attitude begins the slow shift from positive to negative, our self-confidence diminishes even more… and on and on it goes.

So my suggestion is that when giving the choice of “easy to” and “easy not to” that you do not neglect to do the simple, basic, “easy”; but potentially life-changing activities and disciplines.

To Your Success,
Jim Rohn

So what are you finding easy at the moment … success or neglect?
(excerpted from The Challenge to Succeed CD series)

 

Fear of the Exit… It subsides the closer you get!

As my ex-Lecturer Tom McKaskill notes in his column for Smart Company

It is widely acknowledged that a significant portion of private firms will be coming onto the market over the next 10 years as the baby boomer generation nears retirement.

While some have family members to pass the business onto and others will reach an arrangement with employees to buy out their interests, most will be seeking to sell their businesses. With this background, it is hard to understand why so many fail to confront the issue and fail to undertake business and personal planning to provide the best outcome from such an event.

Some founders simply don’t want to let go of their baby. They have often put the best years of their life into building a robust business and the thought that someone else will take control is impossible for them to accept. While they know that a sale is inevitable, they are simply unwilling to spend any time planning for it because it means they are acknowledging they will be selling their business….

Sound familiar? continue reading

Buyers Showing Interest Across a Range of Businesses; Hurst Partners

Today’s business sales market for small to medium size businesses can best be described in one word – “patchy”.  Not all businesses are in demand and buyers are very selective!

Based on current buyer inquiries the following are industries attracting
the most interest:

HIGH…
Accounting, IT services, aged care/personal care
Profitable businesses operating under management

AVERAGE…
Wholesale, niche manufacturing, online businesses
Generally, businesses with a profit BOS* of $100,000 – $150,000
(* Before Owner’s Salary)

LOW…
General retail, health and beauty, home and trade services
Generally, businesses with a profit BOS*of less than $80,000
A positive development is the increasing buyer interest from cashed up professional investors and corporate entities seeking quality businesses delivering a sustainable profit.

This greater level of activity has yet to translate into improved transaction multiples and higher sale prices. However, it should improve overall market confidence if sustained throughout the rest of the year.

In this “patchy” market, advise business owners to start planning ahead if they are contemplating the sale of their business. Putting in the effort to prepare and market the business for sale will increase the chances of locating the ideal buyer; allowing for the owners to exit the business on their terms.

continue reading

If EXITing your Business is the Plan, What Will Make Yours Stand Out?

As The Infinite Group’s Anne Marie Nayna points out in this article…there are a significant and atypically large number of business owners, born between 1945 and 1955, who are in the process of preparing to sell their business. Business Analysts across the globe, report that the largest transfer of business wealth and assets in history is in the process of occurring. With the average age of a business owner in Australia at 58 years, this will only gain further momentum over the next 5 – 10 years.

If you’re one of these business owners, have you considered who your buyer maybe?  Are you are planning a trade sale, a management buy-out/buy-in?  What other means are available in order to unlock your business’ accumulated worth?  Will the entire consideration be paid on day one or are you prepared to defer a portion in order to achieve a higher price?  What are the tax implications of this sale?

Read the full article

Divorce and your business: six scenarios for after the split…

Many businesses are founded and run by a husband and wife team.
What happens to the business if they divorce?

The ‘clean break’ principle

The Family Court’s position is that whenever possible, there should be a clean break between ex-spouses. This means a property settlement, with the combined asset pool being broken into two chunks. When the assets include a business, the property split can take place in a number of ways

Read the full article.

A story by Greg Parker for mybusiness.com.au