What is goodwill and do business buyers still pay for it?

Posted by James Price | JPAbusiness on 02-Oct-2019 02:00:00

Goodwill is an intangible value associated with a business.

As we have explained in other eBooks and blogs, stock, plant and equipment, and other fixed assets, are tangible items that can be relatively easily valued on a market.

Goodwill is intangible; essentially it is the risk premium around how and what business maintainable earnings (BME) will be delivered into the future if the business is acquired by someone else and run in basically the same way.

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Topics: Business Value, Selling your business, Advice, Business transfer, BME, Due diligence, Exiting your business, Business maintainable earnings, James Price, JPAbusiness, goodwill, Parramatta, Orange NSW

3 questions to ask when valuing a business [video]

Posted by James Price | JPAbusiness on 05-Dec-2018 02:00:00

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.

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Topics: Business Value, Advice, BME, Video, business advice, Business valuation, Business advisor, Business maintainable earnings

3 key questions to ask when valuing a business [video]

Posted by James Price | JPAbusiness on 11-Oct-2017 05:19:00

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.

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Topics: Business Value, Advice, BME, 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: Business Value, Valuations, BME

How to manage the 3 risks of a business purchase [blog]

Posted by James Price | JPAbusiness on 04-Aug-2016 04:30:00

 

There is no reward without risk...

Risk and return are two sides of the same coin and most people looking to purchase a business, if it’s not simply to replace full-time employment, should be targeting a return of between 20% and 50% on their investment over time, depending on the business and other factors.In our experience, the risks associated with business purchases fall into three categories:

  1. People
  2. Customers, Suppliers and Market Dynamics
  3. The Value Exchange
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Topics: Business Value, Buying a business, Advice, Customers, Staff, BME, Starting a business, Suppliers

 
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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