Request a Strategy Call and we will get in touch with you
Why do business owners hire an M&A broker?
April 12, 2014 / in Acquire a Business, Business Strategy, Sell a Business / by Jim Leonhard
Recent clients “Jane and John Doe” were satisfied with the market value estimate of their manufacturing business, as determined by the independent valuation we prepared. Armed with this essential piece of information, they were ready to sell the business they had founded and grown with much effort over many years. John thought they should try to sell the business themselves. After all, weren’t they the best salespeople for their business? And why should they share …
What is Fair Market Value?
April 2, 2014 / in Business Valuation / by Al Statz
You’ve heard the term Fair Market Value many times. Fair Market Value is indeed the most common standard of value used in business valuations, but what does it actually mean? Fair Market Value is typically defined as “the price at which the property would change hands between a willing buyer and a willing seller, when the former is not under any compulsion to buy and the latter is not under any compulsion to sell, both …
Why Should I Only Retain a Certified Valuation Expert?
March 17, 2014 / in Business Valuation / by Jim Leonhard
If you’re thinking of using a non-certified or non-credentialed individual to value a business, consider the following recent judicial ruling. The United States Tax Court ruled on February 11, 2014** that a valuation conducted by a non-valuation credentialed individual used for an estate tax filing was materially deficient. The individual who prepared the valuation was both a CPA and a CFP (certified financial planner), had written 10-20 valuation reports, and had testified in court. However, …
Why Should I get My Business Valued?
February 26, 2014 / in Business Strategy, Business Valuation / by Roy Martinez
I received a call the other day from a friend who owns a publishing company. I was telling him about the types of valuation projects I was working on, and he asked, “I’m not in the middle of selling my business or transferring it to my children; why would I want to have my business valued? Besides, I know the rules of thumb for my industry.” The answer I gave him was essentially the following. First …
Increase Business Value with Agreements
February 19, 2014 / in Business Valuation, Exit Planning / by Jim Leonhard
I recently completed an exit planning valuation of a business that enjoyed a very favorable discount on purchases of a key component used in the assembly of its products. The discount, negotiated many years ago, was a handshake deal between the founder of the company and his former employer who manufactured the component. This large discount enables the business to be significantly more profitable that it would be otherwise. Any investor or buyer for this business …
For Historic Mountain Lodge, It’s Not the End of the Rainbow
February 13, 2014 / in News, Sell a Business / by Bob Altieri
The historic Rainbow Lodge in Soda Springs, California, which was in receivership and non-operational for almost a year, has been acquired. This 33-room lodge on the Sierra’s western slope near Hwy 80 was originally built as a stagecoach stop in the 1800’s. In the 1990’s, the owner of the nearby Royal Gorge Cross Country Ski Resort bought it with the intention of providing lodging for skiers. The building is currently undergoing substantial renovations and the business is expected to re-open …
Tip for Maximizing Business Value: Diversify Your Customer Base
February 5, 2014 / in Business Valuation, Exit Planning / by Al Statz
Our seller and business valuation clients are usually proud of their company’s long-term relationships with major clients, and with good reason. Having a high percentage of business with a few customers can be a very profitable and personally satisfying way to run a business. It allows management to focus its attention and fine tune company operations to deliver exceptional service in a very cost-efficient manner. Customer acquisition expenses (marketing, sales, estimating, etc.) can be greatly …
Normalizing Income Statements for Business Sale Transactions
February 1, 2014 / in Sell a Business / by Don Ross
One of the fundamental roles of a business broker is to properly adjust, “normalize”, or “recast” the income statements and tax returns of a business to determine its true earnings power. Where the business has a track record of profitability and the promise of future earnings, market- and income-based methods of valuation are then applied to determine a reasonable price that a buyer should be willing to pay and the seller is likely to receive. Normalizing involves …
Sales of Small Businesses on the Upswing
January 21, 2014 / in News, Sell a Business / by Roy Martinez
According to a recent Inc. Magazine article, “Let’s Make a Deal”, sales of small businesses in Q3-2013 jumped 42% from the same quarter in 2012. Inc. quotes Curtis Krocker, group manager of BizBuySell.com, “After four years of depressed selling and buying activity, the markets are coming back.” Why? Motivated sellers and available financing. Many older baby boomer business owners are ready to sell their business and retire. Having held off selling during and immediately after …
Related Party Transactions in Valuation
January 15, 2014 / in Business Valuation / by Jim Leonhard
I was recently engaged to value a client’s interests in two businesses. These two businesses had several shareholders in common, and the businesses were doing business with each other. We refer to these as related parties and related party transactions. Our client’s ownership percentages were different in each business, so we were concerned with whether transactions between the companies were priced at market, versus prices that unfairly benefit one or the other business. I investigated …
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.
DRE #01878920
Member of
