Transworld Business Advisors, LLC. - Director and Partner
International Business Brokers Association
Business Brokers of Florida
Nestle Waters of America – Market Manager
PepsiCo – Distribution Center and Territory Manager
Airborne Express – Terminal Manager
US Army : Platoon Leader / Company Commander
JMJ Life Center
Family Promise of Greater Orlando
Coalition for the Homeless
Deal Transaction Volume 2013 & 2014
BBF Million Dollar Producer 2006 – 2014
BBF Deal Maker in Deal Volume
Transworld Presidents Club 2006- 2014
CFl MVP Deal Volume 2006 to 2014
CFL MVP Commission Volume 2006 – 2014
BA Providence College History / Military Science
Board Certified Intermediary
Florida Licensed Real Estate Sales Agent
In 2006 after a career in consumer products sales and distribution, Mike came to Transworld looking for a business to
buy rather than continue the never ending cycle of relocation up rooting of his family. He joined the firm as a sales
agent believing that access to the systems and data base he would be able to find a business of his own. Nine plus years
later and over 200 transactions completed he is consistently one of the leading sales producers in the state and the
nation. He has completed transaction ranging from $25,000 to $40,000,000 in sales volume. Mike is also a Partner in
Transworld Business Advisors with over 90 offices worldwide.
Increasing the Value of Your
now and in the future
Valuation Methodology 101
Income Approach Methods
Market Approach Method
Revenue & Profit Comparison
Asset Approach Method
Quality and Quantity of Earnings
Profits/Owner Benefit Levels. (EBITDA vs. Owner Benefits)
Ease of transfer
Diversified Client Base
Top 10 Ways to Increase the
Value of Your Business
Here’s how to rig the system with hot input
and information to increase the value!
• It will be the first thing everyone wants to see
when buying or valuing your business. With
today’s computer technologies and programs
you have zero excuse not to have your business
records completely automated and accurate to
#1 Keep good books and records
• Up trends are very important. A buyer will
value the future earnings based on past results.
If the chart is going up, the future earnings
must have a growth trend too, and the value will
be higher. Would you buy a business that made
$150k, then $200K, then $250K in successive
years? (YES) Would you buy the reverse
business? (NO) Would you buy a business that
was flat? (PERHAPS) Would they be equally
#2 Grow earnings before you sell.
• I know none of you business owners expense
unnecessary items in your businesses. But many
legitimate expenses could even be declared by a
valuation expert as discretionary. (Did you really
have to visit Filta HQ During Bowl Week) Keep
a separate credit card, or accounting notation,
or a journal.
#3 Separate fringe benefits
from real expenses.
• Small businesses are valued on one owner
operator working the business. If your spouse
performs a job that must be replaced, the value
will be negatively impacted. Your best bet is to
phase the family out and have staff that will stay
on after a sale. Also, no buyer wants to work
60 plus hours a week. If you do, you had better
get some staff before you try to sell. Chief
cook and bottle washer business owners will
find it very hard to sell. Transfer the knowledge
#4 Have proper management
and staff in place.
• If your business is cramped and the business is
limited by the current facility and equipment,
you business valuation will reflect that ceiling of
revenues and profits. Either sell before you
need to invest, or buy the equipment and move
the business, and sell in a few years.
#5 Have the capacity to grow
and make capital expenses.
• (Getting the picture yet?) There are several
great accountants and CPA firms in your area.
PICK ONE AND USE THEM!
#6 Keep good books and records.
• Your business is primarily valued based on the
profit to you! And yes, they do use multiples,
and the multiple increases as the profit
increases, i.e. a business making $100K may be
worth 2x’s ($200K), but a business making
$500K may be worth 3x’s ($1.5M)….but
remember #2, the trend also affects multiples.
# 7 Increase the bottom line.
• The value of equipment and businesses will be
higher if everything works and looks nice. Also,
buyers will want everything in working order at
the day of closing…even that old piece of
equipment that you do not use anymore.
#8 Keep everything in good
repair…and if you do not use it
THROW IT OUT!
• You got it now right!! FYI. Any bank looking
to finance the acquisition of your business will
look at least at three years of earnings (this is
not owner benefit) to decide how much they
can lend. If a buyer cannot get enough money
from a bank, you have two choices. Seller
financing, or sell for less. Good books and
records will allow your business to sell fast, for a
high valuation, and be financed with third party
financing. ALL GOOD FOR YOU.
#10 Keep good books and records.
Increase Owner Benefits/Earnings
Keep good books and records
Increase sales over a two year period
Have management in place
Have inventory/assets documented, controlled and managed
Make capital improvements or investments now (not too much)
Have excess capacity to grow
Plan to exit
Hire a professional (Broker* as well as accountant)
Actual Sold Stats - Florida
144078 65000 56069 .451 .389 1.16 NA 1 NA 269
102800 115000 89950 .119 .876 1.27 NA .791 NA 134
280626 125000 73066 .445 .260 1.711 NA .76 NA 609
500000 125000 115000 .25 .23 1.087 .0018 1 NA 182
346291 280000 126282 .809 .365 2.217 .035 .286 NA 52
789689 1645022 425102 2.083 .538 3.87 .086 .0856 NA 252
Filta avg high of 2.12 to a low of .61 at the Sold Price to Sales Ratio
Big marketing budgets produce large corporate clients
Process, support and buying power not available to
Your Franchise adds value. Could push up multiple.
Availability of Franchise financing
Safety addresses the Subliminal Fear Factor
Added Value for Franchises