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, Advice, Cash flow, Case study, Inventory, business advice, selling a business, 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: Case study, business advice, selling a business, Business valuation, Business advisor, James Price, JPAbusiness, Parramatta, client case studies, Central West NSW, transaction advice, business sale transaction advisor, selling my business

How to ensure you get good advice when buying a business [case study]

Posted by James Price | JPAbusiness on 19-May-2021 02:00:00

A few years ago we worked on a business sale transaction in which one side had far less robust advice than the other – you can guess which side was which!

Our client – the vendor – was selling a reasonably large, engineering-style business.

The purchaser – while a successful business operator – was not experienced at acquiring businesses and did not appear to have thought deeply about the sort of expertise they would need to advise and guide them.

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Topics: Buying a business, Advice, Case study, business buying, Business advisor, business broker, risk management, James Price, JPAbusiness, Parramatta, client case studies, buy a business, Central West NSW, business buyer

Mapping a path to a multi-million-dollar sale [client case study]

Posted by James Price | JPAbusiness on 15-Jul-2020 02:00:00

We recently helped facilitate the sale of a client’s business for twice its assessed value – a value we had independently appraised!

The valuation was based on the business’ sales performance, its recent past earnings, our assessment of the repeatability of those earnings given internal and external business health factors, and the assignment of a multiple of earnings.

So, how did the business owner achieve a sale price that so far outstripped our initial valuation?

The short answer is that he had an open mind and was willing to work with us to explore all options for exit.

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Topics: Selling your business, Case study, Exiting your business, strategic value, business advice, Business valuation, Business selling, succession, business sale, exit strategy

5 lessons from a client's business sale [case study]

Posted by James Price | JPAbusiness on 20-Dec-2017 05:00:00

We recently facilitated a business sale for a long-term client in south-west Victoria.

The client operated an industrial services and utilities business that had been operating for over 20 years.

The business had about 20 staff, a turnover of around $5 million and earnings before interest, tax and depreciation in the order of $650,000 per annum.

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Topics: Selling your business, Advice, Case study, business advice, selling a business, client case studies, business sale

Client case study – A business buyer’s story

Posted by James Price | JPAbusiness on 15-Mar-2017 05:33:00

A couple of years ago we were involved in facilitating the purchase of Australian business Denny’s Silo and Engineering, by the Japanese-owned, multinational corporation, Satake.

Our role was to do a business valuation and help Satake Australia negotiate an in-principle agreement with Denny’s, then undertake a detailed due diligence for Satake on the Denny’s acquisition opportunity.

After the successful sale, we asked Craig Doorey from Satake Australia and Bob Denny from Denny’s to share their perspectives on the sale process in our eBook ‘Three sides of the business sale story’, which we published online in September 2015.

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Topics: Buying a business, Selling your business, Advice, Case study, Mergers and Acquisitions

Tips to sell your business from 2 recent business sales

Posted by James Price | JPAbusiness on 15-Feb-2017 05:00:00

JPAbusiness has sold a number of businesses recently and we have been delighted to receive feedback and comments from our clients.

This feedback actually contains some tips for all potential vendors, because it highlights a couple of the keys to success for business sellers.

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Topics: Buying a business, Selling your business, Advice, Case study

The price of poor inventory management [case study]

Posted by James Price | JPAbusiness on 12-Oct-2016 03:20:00

A couple of years ago the JPAbusiness team facilitated the sale of a strong, independent 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.

Continue reading...

Topics: Selling your business, Advice, Cash flow, Case study, Inventory, business advice, selling a business, inventory turnover ratio, cash flow management, business sale

Using valuation as a management tool [case study]

Posted by James Price | JPAbusiness on 07-Sep-2016 05:00:00

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.

Continue reading...

Topics: Business Value, Valuations, Case study

 
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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