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.
At JPAbusiness we often say that business valuation is both an ‘art’ and a ‘science’.
In this video I explain just what that means.
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.
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.
People often confuse the practice of business ‘succession planning’ with ‘retirement planning’.
They are, of course, very different concepts.
Succession planning is a valuable activity for any business, at any stage, regardless of whether the owner is considering retiring, selling or staying with the business for many years to come.
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.
Business valuation is not an exact science and nor is it a simple science.
However there are some factors that should always be considered when assessing a business’ value.
If you’re in business and your business is greater than five years old, you should have your business valued on a reasonably regular basis.
In this video, I explain why.
When we established our first website about 14 years ago it contained fairly basic information on our business. We used it to advertise our clients’ businesses, but otherwise it was static – like putting an ad in the Yellow Pages.
This is the second post in our Top 10 do's and don'ts of business selling blog series.
2. Don't – Head into the sale process without first seeking advice on what your business is REALLY worth
Do – Get a professional valuation
We all know that beauty is in the eye of the beholder. The first business I sold was two retail businesses that had been on the market for eight years.