Does the prospect of putting your business on the market give you the willies? Having prospective buyers wade through the intimate details of your business operations not for you? Then you have probably given some thought to selling your business to insiders. This is a popular exit route with a 2011 survey by the Business Enterprise Institute finding that 41%… Read More
EBITDA, an acronym for Earnings Before Interest, Depreciation & Amortization, is one of the most widely used terms in the world of business valuation, mergers & acquisition, and financial analysis. One hears all the time that businesses are priced as a multiple of EBITDA—e.g. five times EBITDA. Why is EBITDA used this way and what does it really mean? Income… Read More
As published in Lancaster edition of Business2Business, August 2014 issue. In working with business owners, we find that there is confusion about the meaning of terms which leads to a confusion about how to act. Here is our guide to clarify meaning so as to promote a more thoughtful path of action. All businesses above a certain size threshold should… Read More
On May 1, 2014, I conducted a webinar entitled, “How to Leave Your Business in Style” in conjunction with Central Penn Business Journal. If you couldn’t attend the webinar, I am including the Powerpoint and audio files below for your reference. (1) The Powerpoint slides. Webinar 5-1-14 How to Leave Your Business in Style (2) The audio playback. The Powerpoint and audio can be… Read More
My business valuation clients are frequently surprised by the in-depth analysis required in order to do a business valuation. The classic statement of business value is the “present worth of future cash flows”. This statement requires determining two key variables: 1) a good estimate of future cash flows, and 2) an appropriate discount rate that is calibrated based on the… Read More
As I wrote in my previous blog post, I recently invited John Brown, the leading North American authority on succession planning, to Lancaster. I sat down with him to get his personal insights on succession planning following his presentations with business owners and professional advisors. To begin with, he stated that two major problems facing business owners wanting to retire… Read More
I invited John Brown, a Colorado native who is the leading authority in North America on exit planning for business owners, to make two presentations in Lancaster on February 5, 2014 before a select group of ten business owners and five professional advisors. Brown’s presentations focused on the planning process for sales to “insiders” (key employees and family members) as… Read More
When valuing a business, I will sometimes ask the business owner what he/she thinks the business is worth without the owner. This question will elicit various responses. Occasionally, the owner will look indignant and say something like, “What do you mean? I started this business, built it up over 20 years, and am responsible for its success! I am the heart… Read More
