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    Why business sellers should do vendor due diligence

    Posted by James Price | JPAbusiness on 22-Aug-2018 02:00:00

    When business owners come to see us, wanting to sell their business, we often get involved in providing what we term ‘vendor due diligence’.

    Vendor due diligence has two main components:

    1. Understanding what my business is really worth

    This is something we have covered previously in eBooks and blogs about business valuation and market appraisals.
    It involves getting independent advice on what your business is really worth in the market, on a realistic, fair value market basis.

    Continue reading...

    Topics: Selling your business, selling a business, Business valuation, vendor due diligence, business valuer

    What is 'multiple of earnings'?

    Posted by James Price | JPAbusiness on 15-Aug-2018 02:00:00

    Business purchasers want to know: If I buy a business today, how long will it take me to get my money back? 

    Remember, the purchaser doesn’t want to pay for opportunity that they create in the future. They only want to pay for what has been built up by the vendor.

    In the small- to medium-sized business market, purchasers are generally looking from one, to four and a half years, to recover the money they’ve invested.

    Continue reading...

    Topics: Valuations, business advice, Business valuation, Business advisor

    How valuers assess a business' online presence [infographic]

    Posted by James Price | JPAbusiness on 27-Jun-2018 02:00:00

    In order to determine a business’s value we assess business health factors, which may include:

    • Financial performance
    • Quality of product or service delivery
    • Point of difference and competitive position
    • Staff culture and performance
    • Physical location and geographic coverage
    • Diversity, size and quality of clients
    • External pressures on business, including industry trends and dynamics
    • Future projections and prospects.

    In the past five years, a critical new health factor has been added to that list: ‘Online presence and quality of online interaction’. 

    The following infographic illustrates some of the factors we take into account when assessing a business' online position.

    Continue reading...

    Topics: Business Value, Online, Free download, Running your business, infographic, Business valuation

    How to choose a business valuer

    Posted by James Price | JPAbusiness on 09-May-2018 02:00:00

    Business owners often come to us and say things like: “I want to sell my business/I’m interested in taking on a new shareholder/I want to get some finance for my business … and I have been advised that my business is worth X.”

    My common response is: “We’re happy to help, but on what basis is your business worth X?”

    The answer is usually along the lines of: “Oh well, that’s what I was told by my business advisor/financial planner/tax advisor/etc.”

    Continue reading...

    Topics: business advice, Business valuation, market appraisal, business valuer

    3 first steps for business sellers [infographic]

    Posted by James Price | JPAbusiness on 07-Mar-2018 02:00:00

    Selling a business is not a simple undertaking and we have created a number of free resources to help out:

    This week's infographic, however, is for those just setting out on the business sale journey:

    Continue reading...

    Topics: Selling your business, infographic, selling a business, Business valuation, Business selling, business broker

    6 determinants of Business Maintainable Earnings [infographic]

    Posted by James Price | JPAbusiness on 07-Feb-2018 02:00:00

    When determining what a small to mid-sized business is worth, Business Maintainable Earnings (BME) is one of the key concepts the market will consider.

    BME reflects the ability of a business to generate earnings into the future.

    Remember, as a buyer you don’t want to pay for opportunity you will create in the future; unless there is a strategic element to the purchase, ideally you only want to pay for what has been built up by the vendor.

    Continue reading...

    Topics: Business Value, Buying a business, business advice, Business valuation, Business advisor, Business maintainable earnings

    [Video] Don't let over-reliance on key personnel erode business value

    Posted by James Price | JPAbusiness on 03-Jan-2018 02:00:00

    In this video James explains how business value can be eroded when the majority of knowledge and expertise is held by one key individual.

    Continue reading...

    Topics: Video, Succession planning, Business valuation, Business advisor

     
    Disclaimer: The information contained in this blog is general in nature and should not be taken as personal, professional advice. Readers should make their own inquiries and obtain independent, professional advice before making any decisions, taking any action or relying on any information in this blog. 
     
     

     

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