Business valuation is not an exact science and nor is it a simple science. However there are some factors you should always consider when assessing a business’ value.
The following video lists 3 key factors to consider when valuing a business and 3 questions you need to ask to uncover this important information.
Business maintainable earnings,
*You don’t actually have to go to California, but I do recommend taking advantage of professional development opportunities whenever possible.
A senior member of the team and I travelled to California recently to attend the Advanced Business Valuation and International Appraisers Conference. The conference was hosted by the American Society of Appraisers, an international organisation representing all appraisal disciplines, including business valuation.
It was a jam-packed three days of hearing from expert industry practitioners and thought-leaders on diverse topics, including:
Training and Professional Development,
At JPAbusiness we often say that business valuation is both an ‘art’ and a ‘science’.
In this video I explain just what that means.
Many people think of succession planning as an old person’s problem – something you do once you decide to exit your business. This is far from the truth, although it's not surprising the misconception exists.
In planning this blog I conducted a quick Google search of the question 'what is succession planning?' to test the common perceptions. The first result (from an Australian government website!) provided the following answer: "A succession, or exit plan outlines the things you will do when you sell, close or transfer ownership of your business."
I beg to differ. Succession planning should not be something you do when it's time to exit: it is a young person’s pathway to building a valuable business.
running a business,
Good business structures should be effective in:
- Protecting your assets
- Minimising your income tax and capital gains tax
- Simplifying your administration
- Achieving your retirement objectives
- Achieving your estate planning objectives.
We provide a range of services to business buying clients, from initial review and feasibility, through to business valuations, a preliminary assessment of the strength of the opportunity, full due diligence services if the party has lodged a non-binding offer and is seriously interested in the business, through to merger and acquisition facilitation services.
We have helped some clients find the right business within six months while, for other clients, it has taken over three years.
The key phrase is ‘the right business’; I’m sure we could speed up the process if our aim was just to help our clients buy ‘a’ business, but that’s not our job.
Buying a business,
vendor due diligence
Business plans don't need to be weighty documents, but they do need to be:
- referenced regularly,
- shared with others, and
- pressure tested.
The following graphic illustrates the 3 fundamental components of an annual business planning process:
Running your business,
Starting a business,
This is always the million-dollar question when clients come to us seeking help to exit their businesses.
I typically indicate to clients that they need to expect a business sale process to take at least six to 12 months.
The fastest we have sold a business from start to finish is actually six weeks. However, we regard that as a record that will probably never be broken, because it was a unique situation where, strategically, the ‘stars aligned’ between the buyer and the seller.
selling a business,
Selling your business
The JPAbusiness Business Health Check goes back a long way in our company’s history.
When we started JPAbusiness about 17 years ago, one of the first diagnostic services we offered business advisory clients was to conduct a Business Health Check. The aim was to uncover performance-impacting issues in our clients' businesses that weren’t obvious to them and, sometimes, not even remotely on their radar.
And that’s what our Business Health Check template is all about: helping you as a business owner and manager be honest about how your business is performing.
Business health check,
JPAbusiness is on the lookout for outstanding individuals to help us grow our valuation, business broking and business advisory services.
We are looking to fill three vacancies with motivated, inquisitive and genuinely client-focused team members.
The positions are:
- Business analyst – Management consulting and valuation professional
- Transaction advisor/business broker
- Business analyst – Graduate position
The positions will all be based in our corporate office in the beautiful and vibrant regional city of Orange, NSW.