Why You Can’t Sell Your Business
A great post by a Private Equity Group exposing the reasons why businesses that go to them don’t get acquired – 997 out of every 1,000 businesses are not investable. And here are some...
Category: Valuation
Business Valuation, Techniques, Examples
Top 9 Mistakes To Avoid When Selling A Business
In the words of Sam Levinson, “You must learn from the mistakes of others. You can’t possibly live long enough to make them all yourself.” When it comes to selling businesses the biggest mistakes...
Why Do People Keep Asking For Numbers? What If You Just Have Assets Or Intellectual Property?
When selling a business, your main selling point may be the potential of the business, or some software or other asset you’ve built, it may be the reputation of the business or it may...
How Do You Value A Startup?
Raising investment money from Angels or VC’s is a lot different to finding a buyer for an existing business. Existing businesses are often valued on the profits they are generating. But how do you...
Owner Compensation & Effect On Valuation
A short but useful video from Josh Horn, a US based company valuer. He talks about how the size of the owner compensation influences the value of the business. In short, a high owner...
Latest Stats Show Small Businesses Selling For Record Highs, But …
According to BizBuySell, an online platform for the sale of businesses, Q3 shows small businesses selling at the highest prices ever with a median price of $249,000, up 10.7% from a similar period in...
Is It Time To Ditch EBITDA In Business Valuations?
EBITDA or earnings before interest, tax, depreciation, and amortisation is widely used in the valuation of businesses. Where the value of a business is quoted in terms of a multiple of earnings the earnings...
Perda: Investors Paid 7% More For Businesses In 2017
Businesses in the UK have been selling at an average of 7.3 x EBIT, according to PERDa.net. This compares with a multiple of 6.8 in the corresponding period a year ago. According to Perda:...
Nudging Investors Into Making The Right Price Offer
Investors, this article claims, don’t make the “rational” decisions that people assume they do. They respond to events in different ways depending on market conditions or even their mood on the day. For example,...
What Creates Business Value? Kinetic Value vs. Potential Value
While there are plenty of clichés around valuation – a business is worth only what someone will pay for it, for example – there is usually a gap between what a seller wants for...
Buy-Sell Agreements: How Words On The Page Define The Valuation
The wording in a buy-sell agreement that governs the calculation of the price at which the transaction will occur needs to be carefully crafted to avoid disputes and, potentially, litigation. Chris Mercer explains the...
M&A For Tech Businesses Is Just Different, Very Different
Harvard Business Review has a great piece on why acquisition of a digital business is like acquisition of no other business. They argue that everything you know about the acquistion process is a ball...
How To Sell An Insolvent Business
How do you sell a business that is insolvent or on the verge of insolvency? Company Debt, a UK insolvency consultancy explains what can be done to extract value once a company has run...
Unlock Working Capital To Increase Your Valuation
Buyers pay a valuation premium for companies that have better cash flows, argues Divestopedia. And you can improve the valuation of your business by getting a better grip on your working capital. They provide...
What Are Addbacks And How Do They Affect Valuation?
Founders Investment Bank in Birmingham, Alabama, posts today about “addbacks”, the items and amounts that were previously charged to the Profit & Loss account but which can be added back to boost a company’s...
For Accountants: Improving The Quality Of Your Valuations
There are two articles this week for accountants who conduct business valuations. The first is from SageWorks, a company that provides financial analysis and valuation applications to accountancy firms. They’ve called it “How to...
