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Business Valuation Insights
Business Valuations Can Create Value, Not Just Report It!
October 23, 2018 / in Business Valuation, Exit Planning / by Jim Leonhard
I recently completed a valuation engagement for two shareholders of a California manufacturing company who were going through a buy-sell transaction. After the sale, the buying shareholder called to tell me how my valuation report gave him the confidence he needed to complete the purchase, take on debt, and revamp the company’s business plan. Besides making my day, his call made me think about why almost every business owner can benefit from a valuation. When …
Why You Should Know the True Value of your Business
October 5, 2018 / in Business Valuation / by Exit Strategies
The most common time to know the value of your business is when businesses are sold and ownership changes hands. As an owner, you might be retiring from business due to failing health, divorce, or other family changes and you want to know the value of your business to get a fair price. Another motive might be that you have to raise debt or equity financing to meet sudden cash flow requirements or expansion. In …
The Skinny on Valuation Report Options
June 27, 2018 / in Business Valuation / by Al Statz
Users of valuation services should know the most common types of business valuation reports: Detailed, Summary and Calculation of Value reports.* Detailed and Summary Valuation Reports Detailed and Summary valuation reports can only result from a full valuation analysis, not a limited scope analysis. A Summary report covers the same topics as a Detailed report but in less detail. Both sufficiently document the facts, data and information relied upon and the assumptions and analyses made, …
Protect your Trade Name and Protect your Business Value
March 28, 2018 / in Business Valuation, Exit Planning, Sell a Business / by Adam Wiskind
From my experience as an M&A Broker, I can tell you that your company’s trade name will be a valuable asset to most prospective buyers of your business. Your trade name, which identifies your company’s brand and distinguishes its reputation with customers and suppliers, is worth strengthening and protecting if you plan to sell your company some day. It may surprise you that the name of your business, even if it’s not officially registered, receives some …
What are the current expectations for interest rates?
February 21, 2018 / in Business Valuation, News / by Louis Cionci
One of the important factors that effect business value is macroeconomic conditions which include interest rates and the cost of capital. Business owners who want to know what is going to happen to interest rates should be aware of new leadership at the Federal Reserve. On February 5, 2018, Jerome “Jay” H. Powell took the oath of office as the new Chairman of the Board of Governors of the Federal Reserve System, succeeding Janet Yellen. …
Does My Buy-Sell Agreement Establish Value for Estate Purposes?
December 20, 2017 / in Business Valuation, Buy-Sell Agreements, Exit Planning / by Al Statz
Buy-sell agreements that contain a clause that values stock at less than fair market value can be disregarded for tax purposes. It is important to consider the requirements of Internal Revenue Code (IRC) Section 2703 when developing an estate plan involving business interests in which 50% or more of the stock is family owned. Section 2703(a) states that a shareholder agreement (entered into after October 8, 1990) that allows for the acquisition or transfer of …
How Would Your Company Survive Without You?
November 1, 2017 / in Business Valuation, Exit Planning / by Exit Strategies
If you are like many business owners, you tend to get caught up in the daily demands of your business: managing sales and production, costs, and the bottom line. What about preservation and protection? Perish the thought, but what would happen to your company if it was unable to carry on due to your death or disability? These concerns may seem like, and may in fact be, remote possibilities. However, by putting them off, you …
EBITDA – What’s it all about?
August 23, 2017 / in Business Valuation / by Jim Leonhard
EBITDA may seem to be the holy grail of business assessment in the M&A world. Almost every potential buyer starts by asking what is the selling company’s EBITDA; and almost every seller wants to know at what multiple of EBITDA his or her business will sell for. From an accounting standpoint, EBITDA is a simple concept: Earnings Before Interest, Taxes, Depreciation and Amortization. However, it has also been referred to as “Earnings Before I Trick …
Proposed IRC Section 2704 Regulations – What’s all the fuss about?
August 3, 2017 / in Business Valuation / by Bob Altieri
Long-awaited proposed regulations under section 2704 of the Internal Revenue Code, released on August 2, 2016, would make sweeping and very significant changes to the valuation of interests in many family-controlled entities for estate, gift, and generation-skipping transfer tax purposes. For decades, the IRS definition of Fair Market Value (FMV), which is based on the concept of the hypothetical financial buyer, are typically completed on a control basis (more than 50%, but usually 100%), as …
Which Business Valuation Will Facilitate Negotiation?
May 22, 2017 / in Business Valuation, Exit Planning / by Exit Strategies
You are getting ready to sell your business so you must ask yourself some questions: When do I want to exit? Who are the most likely buyers? Is my business adequately prepared to sell? How does it compare to other like businesses? And of course, what’s my business worth? All business valuation relies on some prediction of the future. Business appraisers apply a variety of adjustments to financial statements, theoretical constructs and historical data to …
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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