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This document discusses the importance of business valuations and the challenges small business owners face in obtaining accurate valuations. Traditionally, business valuations are expensive, time-consuming, and complicated processes. However, Neri Capital Partners has developed a proprietary engine that can provide streamlined, reliable, and accurate business valuations by analyzing data from 25 sources. The valuation provides owners with information on the current equity, asset, and liquidation values of their business to help with planning, decision-making, and understanding their business's potential.
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Advisor Presentation
- 1. What your business is Worth …and why it matters Eric Togneri 49 Wisteria Way • Newnan, GA 30265 etogneri@nericap.com • (678) 764-1732 • www.nericap.com Place LOGO, or a picture of you or your team or any other relevant image.
- 2. “ -Ben Franklin An investment in knowledge pays the best interest. “
- 3. Only 2% of small business owners know their business valuation 98% Don’t Know
- 4. Expensive Traditionally, can cost > $10k Time Consuming Traditionally, can take > 4 weeks Complicated Intensive process for already busy owners Not Now Owners wait until an event The Roadblocks
- 5. When is the right time to know? Any time. HOW TO GROW HOW TO RESTRUCTURE WHEN TO SELL
- 6. Worth Deeper understanding of your largest asset Plan Your Future Know the facts for a more accurate retirement or estate plan Protection Ensure you have the right amounts of insurance Make Better Decisions Guided by facts Know Your Potential Understand the ways you can increase the value of your business Get the Big Picture
- 7. A business valuation can put you ahead
- 8. Harnessing big data for the small business owner Our proprietary engine analyzes data from 25 data sources to provide you a streamlined, reliable, sophisticated and accurate business valuation.
- 9. The Complexity Stays Where it Should … Behind the Scenes
- 10. Equity Value (latest valuation) $14,769,80 9 Asset Sale Value $13,656,41 4 Liquidation Value $535,619 Enterprise Value $14,759,55 2 The details you need This fair market value conclusion is the value of the company available to it’s owners or shareholders and incorporates of the assets included in the “asset value” plus the firm’s liquid financial assets (cash, A/R, deposits, etc.) and minus it’s liabilities (ST and LT). This common transaction- oriented fair market value conclusion includes the firm’s inventory, furniture, fixtures and equipment, and all intangible assets ranging from customer base to goodwill. This fair market value estimate is equal to the “total value of the firm” or the value of the firm’s equity plus its long term debt, e.g. it reflects the value of the entire capital structure (equity and debt holders) or “enterprise.” The liquidation value conclusion is based on the key assumption of insolvency and the immediate sale of all assets (on or off the balance sheet) at or near “fire sale” level coupled with the nearly simultaneous retirement of all liabilities. This figure does not include accounts receivable.
- 11. How You’re Doing Comparisons to other companies in your industry in 13 key areas >< =
- 12. .44 Below Industry Average Fixed Assets Turnover 119% Above Industry Average Return On Equity (ROE) 170% Below Industry Average Debt-to-Equity 18% Below Industry Average Cash-to-Debt 31 Above Industry Average Receivables (Conversion) 84 Above Industry Average Interest Coverage 8% Above Industry Average Income-to-Revenue 220 Below Industry Average Inventory Turnover Key Performance Indicators INDUSTRY AVERAGE
- 13. Let us generate a business valuation to give you the facts you need to make sound financial decisions.
- 14. Eric Togneri Place LOGO, or a picture of you or your team or any other relevant image. Neri Capital Partners Attn: Eric Togneri 49 Wisteria Way Newnan, GA 30265 etogneri@nericap.com (678) 764-1732 www.nericap.com Providing Transactional Expertise to Micro-cap and lower Mid-market Businesses Regardless of the lifecycle stage of your business, Neri Capital Partners’ in-depth transactional expertise, driven by a commitment to deliver results, will consistently exceeds your expectations.
- 15. This presentation, including text and attachments, is confidential and may contain privileged information. Any unauthorized dissemination or copying it strictly prohibited. While the information contained in this transmission is believed to be reliable, no representations or warranty, whether express or implied, is made and no liability or responsibility is accepted by Togneri Capital Partners or its affiliates as to the accuracy or completeness thereof. If you have received this presentation in error, please delete it and notify the sender immediately. Thanks.
Editor's Notes
- The Presentation Cover Page: To customize this page for your office we have provided logo and address content areas. To add your own logo click in the image box. This will open up and give you the ability to select your own image or logo from your database. To enter contact information for your firm click on the text to the right of the logo location. The text box will be activated for you and you will be able to enter your own information.
- Quote Introduction Slide: This quote is from Ben Franklin, one of the Founding Fathers of the United States. The purpose of this slide and the quote is to help start the conversation about why a business owner should know the true value of their business. If you would prefer a different quote you can select the text and enter a new quote into the text box.
- Statistic Slide: Statistic courtesy of IBIS World “98% of small business owners don’t know what their business is worth.” This statistic helps to facilitate the discussion around why business owners need to have a business valuation. You don’t plan for retirement a few months before you retire so why would you wait until a major life event to plan for the future of your business?
- Business Owner Objections Slide: This slide introduces four major reasons why business owners neglect to have business valuations performed. 1.) Expensive – Depending on the size of the business and it’s annual revenue, a typical business valuation will cost a business owner an average of $8,000 to complete. Your valuation may be less expensive. 2.) Time Consuming – Traditional business valuations can take up to 4 weeks to complete. Your valuation has a much faster turn around. 3.) Complicated – In order to have a traditional business valuation performed, the business owner will need to gather tax forms, balance sheets and other financial documents and then review these items with a business valuation expert. The interview and fact finding process is lengthy and takes the business owner away from running their business. Your valuation process is fast, efficient, and collaborative. 4.) Not Now– Taking all of these objections into consideration, it’s no wonder that business owners wait until an event requires them to have a business valuation performed. Often times the life event is the MOST inconvenient time to have a valuation completed (ex. Lawsuit, divorce, retirement, downsizing, etc.). You are offering them a way to be prepared.
- When is the right time to know? A business valuation can help ensure you are on track to meet your personal and professional goals. The next slide will introduce many of the reasons why a business owner should know their value.
- Benefits Slide: This slide is here to help you reinforce your message, your value, and the necessity of a business valuation. 1.) Worth – In many cases a business owner’s largest asset is their business. Without knowing the value of their business it is impossible to know a business owner’s true net worth. 2.) Protection – Ensuring proper protection starts with understanding a business’s value. Most business owners do not know what their business’s full worth, which means that they may be undervaluing what they can provide for their loved ones. Proper protection and risk planning can help their families remain financially secure if something were to happen. 3.) Plan Your Future –A business often drives the decisions made around retirement, retirement income, estate, and/or trust planning. Over valuing or undervaluing a business could set a business owner up for an unpleasant surprise in the future. 4.) Make Better Decisions – A business valuation is needed for any business owner making plans for the future of their business; whether it is building a proper succession plan, determining whether or not to sell or pass a business down to a future generation, or simply determining a growth strategy. 5.) Know Your Potential – the business valuation report draws on industry statistics to help business owners gain a deeper understanding of how their business is performing. Key Performance Indicators help bring deeper insight and uncover ways for the business owner to improve their business.
- Transition Slide: A business valuation can put you ahead: Knowledge is power, and knowing your business’s value allows the business owner to ensure their plans and goals are on the right track.
- Your Value Slide: You can deliver business valuations in a fraction of the time and at a lower price point with your new Business Valuation System. Your new technology uses the power of Big Data to deliver an extremely accurate business valuation through a simple 7-step process. This technology utilizes over 2 dozen data sources, providing access to the most accurate information on comparables and multiples for over 900 different NAICUS codes. This means that your valuation takes more factors, data sources, and industry standards into consideration than the typical business valuation. The 7-step process and patented algorithm uses methods from the Market, Asset and Income approach to reach the valuation results. Our methodology and 7-step process has been endorsed by the American Bankers Association (ABA). The methodology and math behind the scenes is tested and accurate, endorsed by industry leaders, and is safe and secure.
- The Complexity Stays Where it Should… This slide helps you introduce the concept of the 7-step process and the technology that helps you deliver accurate business valuations. The technology is very complex, but the process is designed to be intuitive and user-friendly. The 7-step process and patented algorithm uses methods from the Market, Asset and Income approach to reach the valuation results. Our methodology and 7-step process has been endorsed by the American Bankers Association (ABA). The methodology and math behind the scenes is tested and accurate, endorsed by industry leaders, and is safe and secure.
- The Key Figures Slide: 1.) Equity Value – (One of the most common valuations sought after) – Includes Inventory/supplies, fixed assets and intangible assets, PLUS liquid financial assets LESS all liabilities. This value involves the full transfer of the legal entity including all account balances and current tax attributes. (The buyer is acquiring ALL of the assets and liabilities, on and off the balance sheet) 2.) Asset Sale Value – (One of the most common valuations sought after) – Includes ONLY inventory/supplies, fixed assets and all tangible assets. Excludes all liquid financial assets and all liabilities. Buyer operates from newly formed legal entity. (The seller keeps the cash and receivables but delivers the business free and clear of all debt) 3.) Enterprise Value – Enterprise Value is a reflection of the firm’s value as a functioning entity and it is helpful in that it facilitates the comparison of companies with varying levels of debt. 4.) Liquidation Value – Based on the assumption of insolvency and the immediate sale of all assets on the balance sheet coupled with the satisfaction of all debts. This figure does not include accounts receivable.
- How You’re Doing This slide helps you introduce the concept of Key Performance Indicators. When a business valuation is performed, you can not only deliver the 4 valuation figures for your client but also help them get a better understanding of how their business is performing compared to other in their industry. The following slide provides an example of these Key Performance Indicators.
- KPI Slide: Key Performance Indicators deliver great insight into how a business is performing compared to others in the same industry in key comparison areas. There are 13 KPI’s broken down in the 29-page valuation report. 1.) Return on Equity 2.) Receivables (Conversion) 3.) Inventory Turnover 4.) Fixed Assets Turnover 5.) Debt-to-Equity 6.) Interest Coverage 7.) Cash-to-Debt 8.) Income-to-Revenue 9.) Cash Flow-to-Revenue 10.) Receivables-to-Income (Pre Tax) 11.) Inventory-to-Income (Pre Tax) 12.) Fixed Assets-to-Income (Pre Tax) 13.) Total Debt-to-Income (Pre Tax)
- Conclusion Slide: Now that you have told the story of business valuation and the many benefits it can provide, this is your opportunity to relate it back to your firm and services. Include how a business valuation fits into your process when working with business owners and why it is essential to start with a solid understanding of the business owners net worth. Discussion points can include: Retirement and Estate Planning Protection Planning Business Coaching and Planning Opportunities Preparation for a Business Sale or Purchase Continued Service and Added Value for Business Owners Take some time to think about your value proposition and how a business valuation fits in. Make sure to position a business valuation as part of what makes your process and services stand out from the competition.
- Your Name or Firm Slide: This slide is meant to be an advertisement about your team and the services you provide to business owner clients. You can add your picture or your firm logo to this slide. To upload a logo or a picture click on Image Holder and search your own database for the images you would like to use. You can also Include details about your program tailored to business owners, retirement planning succession planning, protection service, etc. To make changes simply click the text you would like to change and begin typing! And don’t forget to add your contact information in the specified location at the bottom of the slide.
- The Disclaimer Page: To insert your own disclaimers, click on the text above and start adding your own verbiage. There are two disclaimer sections, one for your Broker Dealer disclaimer and another for your business valuation disclaimer (if applicable).