Increasing the value of a company requires years of planning and execution. Most valuators look at the last five years of operating results to substantiate their conclusions. So, let’s look at maximizing the value of your business today for a potential sale or transfer tomorrow.
Here are a few basic strategies to optimize cash flow, many of which can be used in both your business and personal lives. 1. Accounts Receivables. This is money that others owe you. You want to receive this cash as quickly as possible. That means billing in a timely manner with reasonable, but tight payment terms…
Most businesses are on a fiscal year which coincides with the calendar year. Now is a good time to look back and reflect on 2020 as well as look forward and create a new budget for 2021. A budget is a roadmap. Based on where you have been, it can help guide you to the desired final destination for year-end.
We are in the middle of a once-in-a century pandemic, but life (mostly) goes on. And the need for business valuations has not gone away. People are still selling their businesses, getting divorced, buying out partners and planning for their futures. People are wondering if they should get a valuation now or wait until there is some semblance of normalcy.
Done right, a competitive analysis should give you an understanding of trends in your industry as well as the competitive landscape. It should identify current and potential competitors within your market, assess their strengths and weaknesses, and determine their target market and ability to deliver.
If you are a co-owner of a business, let’s hope that you have a buy-sell agreement in place. Why, you ask? Well, “stuff” happens. The kind of “stuff” that triggers a buy-sell agreement generally falls into five categories, otherwise known as the four D’s and an R: Death, Disability, Divorce, Disagreement and Retirement.
Most of us know the basics of the McDonald’s story. I consider it required viewing for anyone wanting to scale their business or evaluating their business model. Kroc was the visionary. He took the well-oiled prototype and replicated it across the U.S. and the world. Of course, along the way he added management structure, HR standards and tight quality control.
Business valuations come in different types and flavors. Most people logically think that there is one, and only one, value for a business. But that is not the case. There are three concepts which greatly influence a business’ valuation. They are: Standard of Value, Premise of Value, and Valuation Approaches.
Let me begin with a huge caveat – the facts and circumstances of every business are different. And, there is no way to definitively determine the value of a business (unless of course it is sold) without an evaluator assessing the fact-basis and completing the appropriate valuation analyses for the entity.
Some businesses are less affected by the virus and others are able to creatively keep sales alive. However, the vast majority of companies are finding that business is being seriously curtailed or in some cases, temporarily shuttered. This virus will pass and at some point we will reach normalcy again. But until then, what can we do that is productive with this unwelcome time on our hands?
End of content
End of content