Seeking to exit a business just a few weeks or months after making the decision to do so, is not the best way to optimise value in a business sale.
As I explain in this video, it’s much wiser to incorporate exit and succession plans into your ongoing business planning and prepare for a sale over a period of several years.
Topics: Selling your business, Exiting your business, Video, Succession planning, selling a business, business succession
Many businesses, particularly small to mid-sized businesses, rely heavily on one or two key individuals for the business to operate.
These individuals are often the business owners and they may be reluctant to delegate control and decision making for a variety of reasons.
Whatever those reasons, the result is centralised decision making, knowledge and experience, which are not easily transferable in a business sale.
Ultimately, of course, that impacts business value – and not in a good way!
Topics: Valuations, Exiting your business, Template, Video, Succession planning, Business valuation, risk management, succession, business succession, business value drivers
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.
Topics: Business Value, Selling your business, Business transfer, Exiting your business, selling a business
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.
Topics: Selling your business, Case study, Exiting your business, strategic value, Business valuation, Business selling, client case studies, succession, business sale, exit strategy
Business owners often seek a business valuation after being prompted to do so by a 'significant event’, for example:
In this video I explain how valuation can actually be used as an ongoing management tool, adding value while you’re running the business and also potentially boosting value on exit.
Topics: Business Value, Valuations, Exiting your business, Video, Business valuation, growth strategies
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.
Topics: Business Value, Buying a business, Selling your business, BME, Due diligence, Exiting your business, strategic value, selling a business, Business maintainable earnings, goodwill
As a business owner or manager, there are a number of 'levers' you need to control to successfully manage working capital and drive a successful, cash-generating business.
Topics: Selling your business, Cash flow, Working capital, Due diligence, Exiting your business, Checklist, selling a business
After the process of finding a buyer and selling your business, there is a good chance you’ll still need to turn up to work for a period of time.
Conditions of a sales agreement often include requirements for continuation of service for a transitional period. This involves working alongside the new owner for a set period to share information and knowledge of the business.
Topics: Selling your business, Exiting your business, selling a business, cartoon
Seeking to exit a business just a few weeks or months after making the decision to do so, is not the best way to optimise value in a business sale.
As I explain in this video, it’s much wiser to incorporate exit and succession plans into your ongoing business planning and prepare for a sale over a period of several years.
Topics: Selling your business, Exiting your business, Video, selling a business, business succession
The JPAbusiness Strategic Value Checklist has been created to help you drive positive strategic value in your business.
Don't wait until it's time to sell or exit to work on the business characteristics listed in the checklist. While strategic value drivers are not always quantifiable (as we discussed in our free eBook Strategic Value in a Business Sale) they’re not fairy dust either. They can’t be created with a magic wand overnight!
Strategic value drivers result from real actions you can take to enhance year-by-year earnings in your business, and also potentially assist you to capture extra value on exit of your business.
Topics: Business Value, Selling your business, Valuations, Exiting your business, Checklist
