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Category: Value Factors

Three Strengths (According to Owners) That Might Actually DECREASE Business Value

When we work with business owners to enhance the value and sellability of their businesses, we often facilitate a SWOT analysis, involving owners and their senior managers.   This is usually an efficient and effective way to identify the strengths, weaknesses, opportunities and threats relevant to their companies.  Then we put our “purchaser hat” on, to evaluate how buyers might perceive the SWOT results, and to identify their impact on value. But business owners don’t always perceive value factors the same way that potential purchasers do.  In many cases, we hear owners speak proudly about perceived strengths, unaware that those same factors might increase risk, and consequently decrease value, in the […]

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Mystery Amount x Secret Number = Business Value

What’s inside the black box of earnings & multiples Most business owners understand that small to medium sized businesses are commonly valued by potential purchasers based on some multiple of earnings.  Seems pretty simple, right?? Just multiply one number by another number and BINGO – you’ve got your selling price.  Now all that’s left is to deposit the cheque in your Cayman Islands bank account and order your first BananaMama!! If only it were that simple.  The “earnings” number can take time to figure out, but with the help of a smart accountant (or better yet, an even smarter Certified Exit Planning Advisor), it is do-able.  The challenge is that there are many […]

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