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Fortune Increasing Value Of Your Business Aug06
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Fortune Increasing Value Of Your Business Aug06

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Increasing the value of your business and making it more marketable for sale.

Increasing the value of your business and making it more marketable for sale.

Published in: Business, Economy & Finance

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    • 1. Brian S. Mazar President/CEO
    • 2. Topic
      • Value Drivers in
      • Business Sale
      Introduction Transition Plan Buyer’s View Valuations Finance Organization Operations Marketing Administration Closing
    • 3. Value As Seen By The Market
      • Positioning in the market place
        • Strategic buyers
        • Industry buyers
        • Financial buyers
      • Business continuity
        • Balance short term and long term business needs
        • Employee development and mentoring
      Introduction Transition Plan Buyer’s View Valuations Finance Organization Operations Marketing Administration Closing
    • 4. Transition Plan Results
      • Higher price
        • Manage the factors that affect the valuation
        • Quality financial reports inspire buyer confidence
        • Attract a larger pool of buyers
      • More favorable terms to seller
      • Reduction of tax liabilities
      • Increased satisfaction for
        • Business buyer (new owner)
        • Customers
        • Employees
        • Suppliers
      Introduction Transition Plan Valuations Finance Organization Operations Marketing Administration Closing
    • 5. Good Planning Eases Adversity
      • Owner illness
      • Divorce
      • Death
      • Disability
      • Litigation
      Introduction Transition Plan Buyer’s View Valuations Finance Organization Operations Marketing Administration Closing
    • 6. Business Viability Concerns
      • Performance relative to benchmarks
        • Revenues and revenue trends
        • Income and income trends
      • Expansion potential
      • Competitive advantages
      • Company background
        • Core competencies
        • Company culture
      • Owner dependence
        • Is the owner the business?
      Introduction Transition Plan Buyer’s View Valuations Finance Organization Operations Marketing Administration Closing
    • 7. Financial Concerns
      • Price justification
        • 3 rd party valuation
        • Return on Investment to buyer
        • Payback periods in years
      Introduction Transition Plan Buyer’s View Valuations Finance Organization Operations Marketing Administration Closing
    • 8. Business Valuation
      • Financial statements are key
        • EBITDA multiples
        • Discretionary income multiples
        • Cash and non-cash add backs
        • Value derived from market data
      Introduction Transition Plan Buyer’s View Valuations Finance Organization Operations Marketing Administration Closing
    • 9. Business Valuation
      • Valuation checks
        • Return on Investment to buyer
        • Payback periods in years
      Introduction Transition Plan Buyer’s View Valuations Finance Organization Operations Marketing Administration Closing
    • 10. Financial Issues
      • Report all revenues and income
        • Accurate, complete, verifiable
        • Audited financials are preferred
        • Have good cost accounting system
      • Change from bottom line minimization to profit maximization
        • Mindset of a public as opposed to a private business
      • Have a recent business valuation
      • Tax planning to reduce taxes from sale of business
      Introduction Transition Plan Buyer’s View Valuations Finance Organization Operations Marketing Administration Closing
    • 11. Owners Role
      • Delegate more effectively
        • Reduce reliance on business owner
        • Formal employee training
      • Succession/Exit Strategy
        • Employees related to owner
        • Identify and groom a successor
        • Mentoring of key personnel
      • Succession takes time and effort
        • Complex mix of potentially conflicting issues
      Introduction Transition Plan Buyer’s View Valuations Finance Organization Operations Marketing Administration Closing
    • 12. Partners and Employees
      • Execute agreements with partners
        • Buy/sell and buyout agreements
      • Employee dependency
        • Employee tenure/turnover
        • Employee contracts
        • 401(k) plans to keep employees
        • Culture
      • Human resource documentation
        • Employee handbooks
        • Job descriptions
        • Personnel files
      Introduction Transition Plan Buyer’s View Valuations Finance Organization Operations Marketing Administration Closing
    • 13. Operational Processes
      • Policies and procedures
        • Processes
        • Core activities
        • Systems (consistency of quality, customer service)
        • Equipment maintenance
        • Procedures
      • Technology and automation
        • IT current
        • Equipment up to date
      • Streamline processes
        • Evaluate each product or service to verify contribution to bottom line
        • Outsource non-core activities
        • Analyze and outsource activities that can be obtained cheaper on the outside
      • Inventory control
        • Inventory turnover relative to industry standards
        • Review methods (FIFO, LIFO, etc.)
      Introduction Transition Plan Buyer’s View Valuations Finance Organization Operations Marketing Administration Closing
    • 14. Suppliers
      • Supplier relations
        • Supplier/approval selection process
        • Long-term contract benefits
        • Owner dependent relationships
      • Cost of raw materials
        • Review frequently
        • Renegotiate if necessary
      Introduction Transition Plan Buyer’s View Valuations Finance Organization Operations Marketing Administration Closing
    • 15. Customers
      • Customer retention
        • Friends or relatives of owner
        • Customer service and support
        • Customer loyalty
      • Limited number of customers
      • 80% of revenue concentrated around a small group of customers
      • 20% of business concentrated with one customer
      • Reevaluate Marketing/Sales
        • Direct
        • Reps
        • Agents
        • Internet – new opportunities
      Introduction Transition Plan Buyer’s View Valuations Finance Organization Operations Marketing Administration Closing
    • 16. Marketing and Advertising
      • Marketing strategy/plan
        • Advertising
        • Trade shows
        • Internet
        • Brand awareness
        • Clear and consistent message
        • Differentiation
      Introduction Transition Plan Buyer’s View Valuations Finance Organization Operations Marketing Administration Closing
    • 17. Competition
      • Know your competition
        • Use industry groups
        • Ask your customers
      • Know what they do differently
        • Articulate your advantages and disadvantages
        • Pricing strategy
      • Learn from competitors
        • Benchmark
        • Borrow good ideas
      Introduction Transition Plan Buyer’s View Valuations Finance Organization Operations Marketing Administration Closing
    • 18. Legal Issues
      • Intellectual property is it secure
        • Patent, copyright, and trademark applications
      • Litigation issues
        • Settle all litigation
        • Resolve all product liability cases
        • Resolve all insurance claims
      • Form of incorporation pros & cons
        • C-Corp
        • S-Corp
        • LLC
        • Proprietorship
        • Partnership
      Introduction Transition Plan Buyer’s View Valuations Finance Organization Operations Marketing Administration Closing
    • 19. Regulatory Issues
      • Regulatory status
        • Clear environmental compliance
        • Have environmental review by reputable firm
        • Review all permits and licenses
        • OSHA issues
        • Pending zoning issues
      Introduction Transition Plan Buyer’s View Valuations Finance Organization Operations Marketing Administration Closing
    • 20. Questions Introduction Transition Plan Buyer’s View Valuations Finance Organization Operations Marketing Administration Closing