A recent article in M&A Today offered some observations concerning current and future M&A trends. “The business world is constantly changing. For the first half of the 20th century, vertical integration was the objective in which, oil companies, for example,…
We suspect that the answer to this question depends on who you ask! The Internal Revenue Service (IRS) reports that they received some 24.8 million business tax returns for the year 1999. We can hear the joyful sounds emanating from new business…
Here is a common and much-used breakdown by the federal government: Small Business Administration (SBA): Very Small Business = 19 or fewer employees Small Business = 20 to 99 employees Medium-Size Business = 100 to 499 employees Large Business = 500+…
1. Start with the business – Value Drivers: Size, growth rate, management, niche, history – Value Detractors: Customer concentration Poor financials Outdated M&E Few assets Lack of agreements with employees, customers, suppliers Poor exit possibilities Small market Potential technology changes Product…
“There are many reasons for valuing an entity, and those circumstances can lead to different outcomes…For instance, a business’s value for sale on a going-concern basis will differ from its value for liquidation purposes. It similarly makes a difference if…
Many courts and the Internal Revenue Service have defined fair market value as: “The amount at which property would exchange between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having…
Is there pricing elasticity? What’s proprietary? What’s the company’s competitive advantage? Status of employment agreements and non-competes? Post-Acquisition: Are there cost savings after purchase? Are there significant capital expenditures pending? Is there synergy with the seller? Is it perceived the…
What is the value of your business? There are many ways to approach that question — based on complex formulas or just a good hard look at the balance sheet, but no answer based purely on numbers is going to…
1. Build a solid management team. A business with sales of $5 million and up needs a full complement of officers and directors. Such a team might include: a COO, a CFO, a sales manager and, depending on the type business,…
This question can only be answered by addressing other related questions, specifically: Who’s asking and for what purpose? From the perspective of the owner, prospective buyers, the IRS, lenders and divorce & bankruptcy courts, the value of a business for…
If you are considering entering the world of franchising, an important consideration is assessing the value of the business. All of the following factors either affect or help determine valuations of typical franchise operations: 1. Franchise Agreements: Typically, franchise agreements…
A professional business broker can be helpful in many ways. They can provide you with a selection of different and, in many cases, unique businesses, including many that you would not be able to find on your own. Approximately 90…
