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Business Valuation Insights
Secrets to Business Valuation – a Lesson from Curly
January 8, 2020 / in Business Valuation, Exit Planning / by Al Statz
Remember that scene from the 1991 movie City Slickers where Curly (Jack Palance) shares the secret to life with Mitch (Billy Crystal) shortly before he dies? Curly holds up his index finger and says to Mitch that the secret to life is to figure out his one thing and then stay with it. Channeling Curly today, I will share with you the three things that determine the value of any operating company, with rare exception. …
How Discounts for Lack of Control are Determined
November 27, 2019 / in Business Valuation / by Joe Orlando
I recently penned a summary on valuation discounts for lack of marketability. As a follow-up, this post is about the other common valuation discount, the discount for lack of control (DLOC), which is often used when valuing minority interests in operating businesses. In the business valuation context, control refers to the ability to manage or control a business. A controlling shareholder enjoys many benefits that are not enjoyed by minority interest holders. Minority interests are …
Business Interruption 101
October 31, 2019 / in Business Strategy, Business Valuation / by Exit Strategies
If you are reading this blog post from the Left Coast today, you know all too well the front page pictures and stories on the wildfires affecting Northern and Southern California in the past few weeks. The devastation is unimaginable. As I write this, the Kincade Fire in Sonoma County (just north of our Petaluma office) is 60% contained and 76,825 acres have burned. In local terms, that is about the size of San Francisco …
California’s AB5 Law May Impact Small Business Values
October 2, 2019 / in Business Valuation, Exit Planning, Sell a Business / by Adam Wiskind
Assembly Bill 5 (AB5), signed into law last month by governor Gavin Newsom, will impact the valuation of many small businesses in California that have grown to depend on independent contractors. For impacted owners intending to sell in the near term, this new law may require a change of plan. The new law, which goes into effect on January 1, 2020, creates an explicit three-part test for whether a worker can be classified as an independent …
Ten Factors that Affect the Cost of a Business Valuation
September 25, 2019 / in Business Valuation / by Joe Orlando
In the world of pricing, there are simple models (e.g. cost plus a profit markup) and complex models (e.g. dynamic pricing based on real time supply and demand algorithms ). If you have ever purchased an airline ticket online, you’ve seen how a complex model makes prices impossible to decipher. Fortunately, we can offer greater transparency and consistency on business valuation pricing! Like most professional service pricing models, business valuation pricing is largely a function …
Understanding the Value of Intangible Assets
September 6, 2019 / in Business Valuation, Exit Planning / by Joe Orlando
As a follow-up to our recent post on profiting from intangible assets in a business sale, this post introduces intangible asset valuation. As our last post outlined, “intangible assets are identifiable, non-physical in nature. They are something you can describe, document … and, most importantly, transfer.” Once identified, there are several ways to value intangible assets. I’ll discuss a common approach called the “with and without” method, using a simple and recognizable case study. Let’s …
How a Discount for Lack of Marketability (DLOM) is Determined
July 14, 2019 / in Business Valuation / by Joe Orlando
In a prior chapter of my professional career, I focused on equity security valuations for tax and financial reporting purposes. I led a team of valuation experts who determined the strike price of options granted to employees of up and coming technology companies on their way to IPO. For most, that strike price represents the basis (or cost) of an employee’s future wealth (and tax bill). In simple terms, the valuation of these shares in …
Joe Orlando Joins Exit Strategies; Portland Office Open
March 31, 2019 / in Business Valuation, News / by Al Statz
Exit Strategies Group, Inc. (ESGI) is pleased to announce that Joe Orlando, ASA, has joined us as Vice President of Valuation Services. Joe will perform the full range of business valuation services for our clients and provide technical leadership to our team of accredited valuation experts. Over the past 15 years Joe has valued hundreds of early to late stage companies in various industries. Some of his focus areas have been technology (software, ecommerce and …
Financial exit planning, Is your business ready?
March 13, 2019 / in Business Valuation, Exit Planning, Sell a Business / by Exit Strategies
I recently had a client looking to sell their medical supply business and retire. I worked with management to pull together all the documentation and financials needed, and conducted conduct a probable selling price analysis. With report in hand I met with our clients to review the results and plan a go-to-market strategy. Unfortunately, the probable selling price fell slightly short of what the client needed to retire (after taxes). We identified excessive inventory as one …
Ken McCauley Joins Exit Strategies as Senior Valuation Analyst
February 20, 2019 / in Business Valuation, News / by Al Statz
Exit Strategies Group is pleased to announce that Ken McCauley, CPA, ABV, has joined us a Senior Business Appraiser in our North San Francisco Bay Area California office. Ken will provide a broad range of business valuation services for our clients. He has been appraising businesses since 2010, including wineries, medical and professional services, software, retail, restaurants, manufacturing, construction, and businesses in other sectors. Prior to joining Exit Strategies, Ken was a partner in AL Nella …
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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