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Business Valuation Insights
A Difference of Opinions: Closely-Held vs. Venture-Backed Companies- Part 1 of 2
March 17, 2023 / in Business Valuation / by Joe Orlando
In my transition from valuing venture-backed technology startups to valuing closely-held businesses with between $2 million to $50 million in revenue when I joined Exit Strategies Group four years ago, I noticed major differences in diligence, tools and approaches used in forming these opinions of value. This blog will focus on the differences in Diligence and Tools. But before I dig into those differences, let’s define these two types of businesses: Venture-Backed Companies – These …
Highlight Your Company’s Intangible Assets When Selling
February 28, 2023 / in Business Valuation, Exit Planning, Sell a Business / by Al Statz
Intangible assets represent most of the value in almost all of the companies we sell, so it only makes sense that showcasing the intangible assets that make your company unique and successful can significantly impact your final transaction value. Here are some practical tips to help you leverage your intangible assets in a sale process. Intangible assets are non-physical assets such as contracts, customer lists, proprietary software, databases, designs, recipes, proprietary business processes, well protected …
Business Valuation 101 for Testing Laboratories
January 31, 2023 / in Business Valuation, Exit Planning / by Adam Wiskind
Testing laboratories operating in the agriculture, food production, environmental, manufacturing and construction industries provide essential and recurring services to their customers. As such they can be attractive to investors looking for steady growth, recession-resistant acquisition opportunities. If you own a testing laboratory and are thinking about an exit, you’ll likely want to know its value. Business valuation can help lab owners to plan for their future and to understand how to improve their company’s financial …
Spring Break 2022
June 21, 2022 / in Business Valuation / by Joe Orlando
We all remember the question; what did you do on your spring break? Whether it was the title of a paper you needed to write for 11th grade English class or the topic of discussion at the pub in late April of your senior year of college, it’s a great question whose answer can be as boring as it is exciting. So what did I do on my spring break this year? I’ll tell you… …
Six Benefits of Monitoring Company Value
April 21, 2022 / in Business Strategy, Business Valuation / by Al Statz
Even if your business is not for sale, monitoring its market value can be incredibly helpful. This article describes six ways that understanding value over the life of a closely held business benefits shareholders, directors and managers. 1. Value Report Card Like financial statements, an annual independent business valuation is a type of report card on company health. CEO’s can use this report card to educate, align and focus executive teams on maximizing enterprise value. …
The Importance of Valuation in Business Sales
April 4, 2022 / in Business Valuation, Sell a Business / by Al Statz
With decades of expert valuation and real-world business transaction experience, Exit Strategies routinely values companies and positions them for successful sales. At a minimum, buyers should be willing to pay the fair market value of a business. The initial and perhaps most important step in selling a business is a thorough, objective, and accurate business valuation. Too many sellers and brokers shortcut the valuation phase, not understanding that it is an essential step to accurately …
Tracking your Business Perks
February 18, 2022 / in Business Valuation, Sell a Business / by Al Statz
Perks is an abbreviation of perquisite, which means a benefit, incidental payment, or advantage over and above regular income, salary, or wages. Business owners take any number of perks from their business, from the standards like auto expenses, memberships, and insurance plans to extras like entertainment, vacations, or an additional family member on the books. Perks are a way for owners to be further compensated for their hard work. However, they can complicate valuing a …
Understanding Discount Rates – Parts 1 through 5
February 2, 2022 / in Business Valuation / by Joe Orlando
The Risk Free Rate – Part 1 of 5 One of the most important inputs surrounding the valuation of the business is the discount rate that is used in the analysis. This discount rate is the expected rate of return on the subject interest which in most cases is the equity in the value of an operating business. Most often in our practice, this equity is attached to a private business that is owner operated. …
Understanding Discount Rates: The Cost of Debt and the Debt to Capital Ratio – Part 5 of 5
February 2, 2022 / in Business Valuation / by Joe Orlando
The first four parts of this five-part blog have dealt solely with the components of the buildup approach and the determination of a cost of equity. However, when determining a discount rate, it is important not to forget the ability to access debt. Each of the preceding parts of this discussion focuses on the cost of equity. This last part introduces the cost of debt and the debt to equity ratio in determining the weighted …
M&A Advisor Tip: Perks & business value
February 2, 2022 / in Business Valuation, Exit Planning, Sell a Business / by Al Statz
Business owners take a number of perks from their business, from the standards like auto expenses, memberships, and insurance plans to extras like entertainment, vacations, or an additional family member on the books. Perks are a way for owners to be further compensated for their hard work. However, they can complicate valuing a business. When preparing your business for sale, your advisors will “normalize” your financials to account for these extras. Be aware of providing …
Exit Strategies Group, Inc. is a leading provider of business sales and acquisitions, business valuations, and exit planning services for family owned and closely-held companies since 2002.
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