From our Blog
How Will Baby Boomers Sell Their Businesses?
The First Wave of Baby Boomers Is Wondering How To Divest Their Businesses An entire generation of successful entrepreneurs is now asking itself, “What next”? And that’s just scratching the surface. The first wave of baby boomers – a generation now typically aged about 50 to 68 – is wondering how to divest their businesses. I know from experience that now…Read More
The Right Time to Sell?
Pinpointing the Right Time to Sell Your Business The past few years have been very good to my friend Bill. His business is flourishing and each year has been better than the last-quite a common situation in Alberta right now. “I’m not quite ready to retire,” Bill said the other day. “The company is doing better than ever.” His…Read More
A Good Handicap & Business Value
How a Good Handicap Increases The Value Of Your Business One of the most entertaining conversations I have with business owners is my ‘go golfing’ metaphor discussion. During my formative years as a Business Broker, I developed a valuation model that was supported with ‘The Ten Fundamental Factors That Affect Business Value’. One of these…Read More
Baby Boomers Devalue Your Business
Baby Boomers: The Real Culprit Affecting Business Value One of the most interesting conversations I have been having with business owners coming through my office lately is about what the future holds regarding the value of their business. Virtually all business owners are concerned how low oil prices and the effect of an NDP government will affect…Read More
EBITDA & CAPEX
EBITDA, Normalized EBITDA, & CAPEX Earnings before interest, tax, depreciation, and amortization (EBITDA) is a measure of the cash flow of a business. EBITDA is calculated as follows: Net income before taxes + Interest on long-term debt + Depreciation and amortization Normalized EBITDA Smaller, privately owned businesses typically require additional adjustments to EBITDA: Revenues or expenses…Read More
Business Valuation Multiples
A multiple, or multiplier, is applied to the cash flow (in our case, EBITDA) of a business to determine its value. The multiple is a way of measuring a buyer’s level of risk. The higher the multiple, the lower the perceived level of risk. That’s why large “Dow Jones” businesses sell for much higher multiples…Read More
Value Enhancement: Qualitative Factors in Selling a Business
If you’re not planning to sell your business right away, you have the opportunity to build its value. Bear in mind though, that the landscape for selling businesses has changed significantly. A majority of business owners are nearing retirement and the upcoming 5-10 years or longer will likely be a buyer’s market. This is a…Read More
Qualitative Factors in Selling a Business
It’s obvious that buyers will first look at the financial factors of a business for sale, such as past and current profitability and trends. If a business isn’t profitable, it has no value beyond the value of its assets. Assuming a business is profitable, it will have a certain value to buyers. The value, however,…Read More
Business Value Drivers
Business value drivers are those factors that can affect the value of your business and the eventual sale price. Although they could all be important, there are some that are almost always examined by buyers. These are what we call the Ten Fundamental Factors That Affect Business Value, or the key business value drivers. Key…Read More
Business Value: What’s Your Business Worth?
It’s natural that you would place a higher value on your business than a buyer would. You probably invested years into building your business, and you no doubt have some strong emotional ties to it. But buyers just want to know if buying your business is a good investment. It’s rare for them to have…Read More
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