How to avoid real estate traps when buying a business [cartoon]

Posted by James Price | JPAbusiness on 17-Oct-2018 02:00:00

Businesses – particularly family businesses – often use real estate assets as part of their wealth generation strategy.

This may lead to situations where the business and real estate assets are interdependent, creating complexities when it comes time to exit and establish a fair market valuation.

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Topics: Family business, Business Value, Selling your business, Buying a business, Starting a business, Advice, Valuations, cartoon

How to use valuation as a management tool [video]

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

Don't wait until someone offers to buy your business to seek a business valuation or market appraisal.

Valuations are extremely useful management tools for business owners looking to maximise their current business performance and long-term value.

A valuation can help you identify what you are currently doing that is adding to your business value, and what you are doing that is detracting from value.

My advice is that, if your business is greater than five years old, you should have it valued on a reasonably regular basis.

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Topics: Valuations, Business Value, Advice, Video, business advice, market appraisal, business management

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.

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

How can a valuation add value to a business? [video]

Posted by James Price | JPAbusiness on 20-Jun-2018 02:00:00

Business owners often seek a business valuation after being prompted to do so by a 'significant event’, for example:

  • a family break-up
  • retirement
  • need for business restructuring
  • bank lending requirement
  • purchase offer
  • bringing in a new shareholder or partner, and so on.

In this video I explain how valuation can actually be used as an ongoing management tool, adding value while you’re running the business and also potentially boosting value on exit.

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Topics: Valuations, Business Value, Exiting your business, Business advisor, business management, growth strategies

How to value a business

Posted by James Price | JPAbusiness on 13-Jun-2018 02:00:00

Business Maintainable Earnings (or Sustainable Earnings) is often the way the market values businesses, particularly small- to medium-sized enterprises that are not traded on the stock exchange.

Business Maintainable Earnings (BME) is the ability of the business to generate earnings into the future.

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Topics: Advice, Business Value, Valuations, Buying a business, Selling your business

Free template: Succession planning scorecard

Posted by James Price | JPAbusiness on 06-Jun-2018 02:00:00

As a business owner, it’s never too early to start thinking about your succession strategy and developing the skills of your team and business capability.

Many people think of succession planning as something old people do once they decide to exit their business. This is far from the truth.

Succession planning is a young person’s pathway to building a valuable business. It’s about creating a sustainable business that will continue to operate successfully into the future, whether you stay in the business or not.

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Topics: Succession planning, Selling your business, Advice, Business Value, Valuations, Business advisor, business management

Case study – What is the difference between share value and assets value when selling a business?

Posted by James Price | JPAbusiness on 04-Oct-2017 05:20:00

I was recently involved in a transaction where two equal shareholders and directors of a company had decided to part ways. The company had been operating in the business services sector for 20 years and the plan was for one director to buy the other out.

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Topics: Advice, Selling your business, Valuations, Business Value

What is the difference between a market appraisal and a valuation? [video]

Posted by James Price | JPAbusiness on 23-Aug-2017 05:31:00

Business market appraisals and valuations are both robust assessments of a business’ worth and are appropriate for use in different circumstances.

In this video I explain the difference between a business market appraisal and a business valuation and when each should be used.

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Topics: Valuations, Business Value, Advice, Video

How to calculate Business Maintainable Earnings [infographic]

Posted by James Price | JPAbusiness on 07-Jun-2017 04:40:00

Business Maintainable Earnings (BME) reflect the ability of a business to generate earnings into the future.

BME is the one of the most important concepts the market will consider when assessing a business’ value.

The following infographic shows how to take account of abnormal fluctuations in your business’ performance (i.e. normalise) and calculate your business’ BME.

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Topics: BME, Business Value, Valuations

 
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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