Good insights from John Carvalho from Divestopedia
What Buyers Look for in a BusinessI recently found myself watching NBC’s "Shark Tank," where aspiring entrepreneurs pitch their business concepts and products to a panel of business moguls who have the cash and the know-how to make it happen. Hands down, the fastest way to get thrown out of the tank is to have an unrealistic valuation of your business.
Great Companies Drive ValueIf building a company was a sport, the value of the company would be how we keep score. Jim Collins, author of "Good to Great," identified elite companies that have made the leap from good to great. Companies that make the leap were defined as meeting the following criteria:
The Benefits of Regularly Updated Business ValuationsFor me, the same question always come to mind: Why haven’t valuations become more commonly adopted as a strategic planning tool for private businesses? Every year, companies engage accounting firms to audit, review or compile their books. This requirement is driven by banks, tax authorities and others that require financial statements verified by an independent third party. I truly believe that an annual valuation would provide most business owners with more insight into their company than audited financial statements.
A Better Valuation ToolHere are my thoughts on a better valuation model compared to traditional valuations currently offered by most advisors:
A Better Valuation Model:
Dave Kauppi is a Merger and Acquisition Advisor and President of MidMarket Capital, providing business broker and investment banking services to owners in the sale of lower middle market companies. For more information about exit planning and selling a business, click to subscribe to our free newsletter The Exit Strategist