How to prove goodwill value [templates]

Posted by James Price | JPAbusiness on 01-Jul-2020 02:00:00

Goodwill ­is a key component of business value, alongside factors such as working capital and plant and equipment.

Many people think of goodwill as an ‘intangible’ and therefore its value can’t be proved, but that's not necessarily the case.

Goodwill value relies on being able to prove the sustainability of a business’ earnings going forward.

In this blog we’re going to explain how record-keeping is a critical component of proving that sustainability, and provide some simple templates to get you started.

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Topics: Business Value, contracts, business advice, Business valuation, JPAbusiness, goodwill, Parramatta, Central West NSW, work in progress, WIP, tendering

Business valuation or market appraisal – what is the difference? [video]

Posted by James Price | JPAbusiness on 18-Mar-2020 02:00:00

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: Business Value, Advice, Valuations, Video, Business valuation, market appraisal, valuing a business, Parramatta, Orange NSW

Parramatta new home base for JPAbusiness

Posted by James Price | JPAbusiness on 18-Mar-2020 02:00:00

Last year we told you about our move to Parramatta in Western Sydney. Well, it’s been just over 12 months and we’re loving it!

It’s now time for us to consolidate our physical footprint within one office, which will be the Parramatta office. As a result, we have closed our Orange office, but our corporate address and roots remain firmly in the central west, at Blayney, NSW.

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Topics: business advice, selling a business, Business valuation, Business advisor, business valuer, running a business, James Price, JPAbusiness, Parramatta

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

Posted by James Price | JPAbusiness on 15-Jan-2020 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, Parramatta, Orange NSW

How to think like a buyer when selling your business

Posted by James Price | JPAbusiness on 06-Nov-2019 02:00:00

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

This basically involves us 'pretending' we're a buyer and has two main components:

1. Understanding what the business is really worth i.e. conducting an independent valuation or market appraisal

2. Understanding how the business appears to a potential purchaser.

That second component is the core part of vendor due diligence and involves looking at the business from a purchaser’s point of view:

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

What determines your Business Maintainable Earnings? [infographic]

Posted by James Price | JPAbusiness on 02-Oct-2019 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.

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Topics: Business Value, Buying a business, infographic, business advice, Business valuation, Business advisor, Business maintainable earnings, James Price, Parramatta, Orange NSW

Should I get a valuation or a market appraisal? [infographic]

Posted by James Price | JPAbusiness on 11-Sep-2019 02:00:00

Clients often ask us whether they need a valuation or a market appraisal.

The answer has a lot to do with the ultimate purpose of the valuation or market appraisal. For example:

  • Does the valuation/appraisal need to stand up in a court of law?
  • Will the valuation/appraisal form part of a transaction/settlement process?
  • Is the client seeking an indicative view of a business' fair market value and the likely factors that add to and detract from that value?

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Topics: infographic, Business valuation, business management, market appraisal, business valuer

Do I have to get a valuation before selling my business? [video]

Posted by James Price | JPAbusiness on 04-Sep-2019 02:00:00

The simple answer is ‘no’, you don’t need a valuation to sell a business.

However, in terms of engaging JPAbusiness to sell your business, the answer is ‘yes’: we always recommend clients have their businesses independently and professionally valued before they invest time and money in a sale process.

In this week's video I explain how our first experience of helping a client sell their business – combined with our many years of subsequent experience – has shaped this philosophy regarding valuation and its role in a successful sale process.

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Topics: Video, business advice, selling a business, Business valuation, Parramatta, Orange NSW

What are some 'rules of thumb' for valuing businesses? [Video}

Posted by James Price | JPAbusiness on 21-Aug-2019 02:00:00

When it comes to valuing businesses – listed or private – you will often hear people refer to ‘rules of thumb’. 

Some will say the value of a business is:

  • ‘x times its revenue’ or
  • ‘x multiples of its earnings’ or
  • ‘a function of its after-tax profit’ or
  • ‘a function of its gross profit’ and so on.

These ‘rules of thumb’ tend to be industry based i.e. “a business in Industry A is worth ‘x’ times multiple of earnings” while “a business in Industry B is worth ‘x’ times revenue”. (I won’t repeat the actual ‘rules’ I’ve heard – I don’t want to encourage anyone to use them!) 

In this week's video I provide a practical example which illustrates why relying on rules of thumb is too simplistic when valuing complex businesses.

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Topics: Business Value, Video, business advice, Business valuation, Business advisor, business valuer, JPAbusiness, Parramatta, Orange NSW

How long does it take to buy a business? (Video)

Posted by James Price | JPAbusiness on 14-Aug-2019 02:00:00

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.

In this video I explain why it's important not to rush into buying a business, and share four tips for managing risk during the business buying process.

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Topics: Buying a business, Video, business advice, Business valuation, Business advisor, vendor due diligence, Parramatta, Orange NSW

 
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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