Learn the latest valuation techniques to price almost any small business and identify business bargains. This user-friendly manual includes forms, checklists, tables, examples and anecdotes that enable entrepreneurs to get professional valuation results. With this book in hand small business owners and buyers will have the ammunition needed to win negotiations by dealing from a position of strength.
|Publisher:||Facts On Demand Press|
|Edition description:||4th Edition|
|Product dimensions:||5.90(w) x 8.90(h) x 0.80(d)|
Table of Contents
A Word from the Author xiii
Section I Techniques
1 You Value Your Business, But Can You Evaluate It? 1
A variety of indicators of value produce many different results. Cut through to the bottom line by identifying the method that best suits you and your business type.
2 How to Find the Diamonds When Mining for the Facts 11
Detailed disclosures are necessary to accurately assess a business. A due diligence is an important fact-gathering tool; learn how to obtain and use it.
3 Reading Business History-Balance Sheets 23
Learn how to read business financial statements to discover keys that unlock the real value of a business.
4 Reading Business History-Profit & Loss Statements 33
A simple path to understanding profit & loss statements, earnings summaries, and even a simple formula to determine the Real value of inventory.
5 Net Profit Versus Cash Flow 43
Maximized expenses and minimized earnings can lead a buyer astray. Learn which expenses are PERKS and PLOWS, and perform an earnings reconstruction to find the true net profit and cash flow.
6 Management Compensation 57
How much is the right amount to expect to pay for management? Learn ways to find out using local, Internet and US government resources.
7 Financing: Using Other People's Money 63
Learn the basic elements of financing-cap rates, debt coverage ratios, loan to value ratios-to obtain an advantageous financing structure to start bigger and grow faster.
8 A Pricing Multiple for Any Business 77
Learn the dangers of using multiples to indicate value of a business and how to customize and calculate one multiple that works with almost any business.
9 Indicator of Value 1:Capitalizing Income 93
Get quick answers with the first of three powerful tools. The capitalization method uses an amazingly simple three-step equation, the IRV formula, as a marketing approach to indicating business value.
10 Indicator of Value 2: Multiple of Excess Earnings 99
A good tool to use when you want to identify the value for goodwill. It's also helpful when owners are selling business potential rather than current or trailing earnings.
11 Indicator of Value 3: Levering Cash Flow 105
This is the gold standard of value indicators. It accommodates a buyer's need for financing and compensation to run a business at a business value that makes sense. Four simple steps and how to obtain the facts and figures you need.
12 Unlocking the Bank Vault 117
How to get what every seller wants...cash and at an affordable price, too. Guidelines for comparing seller versus bank financing.
13 Home "in" on the Range 123
Working with several indicators of value can improve the accuracy of the result. Here's how to put them together in a manageable way.
Section 2 Strategy & Tactics
14 Investors Raise a Challenge to Buy Low 127
Buyers learn to employ their business valuation skills and facts revealed in a due diligence to raise challenges and negotiate a lower value.
15 Sellers Rise to Challenges and Gain Control 139
Sellers employ indicators of value to keep negotiations going in the direction they want. Use a due diligence, business multiple, and other indicators of value to your advantage.
16 Plan Ahead to Sell High 149
Prospective and current business owners alike can position a business as high-value with simple techniques including documentation, forecasting and targeting the right buyer for the business.
17 Business "Sale by Owner" Strategies 155
You can sell it yourself, and here's how to get the highest price in the shortest time with the least amount of effort. Learn the secrets of professionals that keep buyers from walking away.
18 Tactics to Boost Business Value 169
There are many things you can do to increase the value of your business before you sell. Here are just a few to start with that include specifics, a support team, advertising, how to advertise and qualify buyers to avoid tire-kickers.
19 Parts Sold Separately...for More 177
Many underestimate the potential to earn more by selling a business and real estate separately. This strategy is fully explained to illustrate the many profitable options available when put to use.
20 Service Businesses: Worth More Than Many Realize 193
Value is not about bricks and mortar anymore. It's about the value of people and processes that result in a cash flow. Contrary to historical thinking, these have real value, so service businesses can be bought and sold for big profits.
Appendix A Shortcuts-A resource for those who want results fast without the research 203
Appendix B General terms and features of acquisitions 217
Appendix C Business Valuation Forms 233