How to value a business [video]

Posted by James Price | JPAbusiness on 22-Dec-2021 06:00:00

People are often critical of business valuation – and sometimes I’m one of them – because it’s a very theoretical process.

In fact, some cynically regard it as hocus-pocus: some science, some gut feel, coupled with a bit of rationale.

It’s true that business valuation is not an exact science, but good valuers base their valuations on empirical evidence and robust assessment, underpinned by regular engagement in the market.

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Topics: Business Value, Video, Business valuation, business valuer

How to win new sales using digital technology

Posted by James Price | JPAbusiness on 03-Nov-2021 08:00:00

In this week's blog I'm sharing Chapter 2 of our new ebook: Ultimate guide to boosting business value through online activity.

In Chapter 2 I tell the story of a company in our network that responded to the COVID-19 lockdowns by drastically changing its sales strategy and, as a result, grew sales by 2030% while reducing travel costs by 80%.

You can:

  • read Chapter 2 below,
  • download the complete ebook, or
  • watch a video where I discuss the chapter on our YouTube channel.
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Topics: Digital marketing, Business Value, eBook, digital strategy, online strategy

Ultimate guide to boosting business value through online activity

Posted by James Price | JPAbusiness on 28-Oct-2021 06:00:00

Over the years we’ve been fortunate to work with some fantastic businesses and add real value to their bottom lines.

We wanted to find a way to share the experiences that we have seen bring real, positive outcomes for businesses. The result: our Ultimate guide to boosting business value through online activity ebook.

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Topics: Business Value, Video, eBook, digital strategy, online strategy

How to make sure you pay a fair price when buying a business

Posted by James Price | JPAbusiness on 20-Oct-2021 02:00:00

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.

In this blog we’re focusing on the third risk category, the value exchange, and how you can manage that risk.

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Topics: Business Value, Buying a business, Business maintainable earnings, risk management

How often should you have your business valued? [video]

Posted by James Price | JPAbusiness on 06-Oct-2021 02:00:00

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:

a) adding to your business value, and

b) detracting from that value.

My advice is that, if your business is greater than five years old, you should have it valued on a reasonably regular basis, say every 2–3 years depending on your growth track and the external environment the business is experiencing.

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Topics: Business Value, Valuations, Video, business management, market appraisal, business valuer

Don't pay the price of poor inventory control when selling a business

Posted by James Price | JPAbusiness on 15-Sep-2021 02:00:00

A few years back the JPAbusiness team facilitated the sale of a business involved in import and distribution.

It was a well-known, independent brand that had been established for well over 50 years and had solid bottom-line performance.

Unfortunately, when it came time to exit the business, it soon became apparent there was too much inventory (stock on hand).

We negotiated a price for the goodwill, plant and equipment etc, based on a multiple of Business Maintainable Earnings (BME), which is essentially the cash flow of the business.

Then it was time to address the stock value.

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Topics: Business Value, Selling your business, Cash flow, Case study, Inventory, selling a business, client case studies, cash flow management

How to use valuation as a management tool [case study]

Posted by James Price | JPAbusiness on 25-Aug-2021 02:00:00

Most business owners only seek a business valuation after being prompted to do so by a significant ‘event’, for example family break-up, retirement, need for business restructuring, bank lending requirement, purchase offer and so on.

My experience indicates the opposite course would be better: valuation should be considered a management tool and be done before, and separate from, such business and emotive life events.

The following case study shows how an independent valuation, carried out early, would have made life a whole lot easier for one of my clients.

Instead this client found themselves in a credit squeeze with little understanding of the true value of their business to potential financiers and the drivers that really matter to external parties.

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Topics: Business Value, Valuations, Case study, Business valuation, business management, client case studies

Do I need a valuation before selling a business? [case study]

Posted by James Price | JPAbusiness on 30-Jun-2021 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 a resounding ‘yes’, you do need to get a valuation before you embark on a sale process.

The reason for that is part of our point of difference among business brokers. It’s based on a lesson learned early in the life of JPAbusiness, and backed by years of subsequent experience. 

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Topics: Business Value, Case study, selling a business, Business valuation, client case studies, transaction advice, selling my business

What is 'strategic' value when buying or selling a business?

Posted by James Price | JPAbusiness on 12-May-2021 02:00:00

Strategic value is the value a purchaser is willing to pay for a business, over and above what an impartial business valuer might determine is ‘fair market value’.

As we have discussed in our eBooks, one common method of determining a business’ fair market value is to use a multiple of earnings.

Multiple of Earnings is the term for how many years or months a purchaser is prepared to wait before they recoup the value they paid the outgoing business owner, based on an assessment of business maintainable earnings (or sustainable earnings).

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Topics: Business Value, Buying a business, Selling your business, Template, strategic value, Checklist, business value drivers

5 questions for business sellers to help maximise value on exit

Posted by James Price | JPAbusiness on 03-Mar-2021 02:00:00

Q.1 Do I really want to sell my business and, if so, why?

  • Do you want to sell because you’ve had the business for five years and the results have been poor?
  • Do you want to sell because you’re over-exposed to borrowings, your cash flow is tight and you can’t see a way to get ahead?
  • Do you want to sell because it’s time to retire or move on to the next stage of your career?

Your reasons for selling will help you create a negotiation framework to determine what an acceptable offer might be, so it is critical you be honest with yourself when answering this question.

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Topics: Business Value, Selling your business, Business transfer, Exiting your business, selling a business

 
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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