In some MBA programs they clearly define the ultimate return on investment (ROI.) At the Booth School of Business at the University of Chicago, I was taught: ROI: Income (before distributions to suppliers of capital) for a period. As a rate, this amount divided by average total assets. Interest, net of tax effects, should be added back to net income for the numerator. (source-Managerial Accounting, Maher, Stickney, Weil 1994) Usually this is applied, [...]
Susan, my good friend, started a service business for $10,000. The business has matured and does quite nicely. The first year, she had a ROI of -0- after a wage of $30,000. Now, ten years later, she has an annual ROI of 500% after a fair market wage of $60,000. She never had to invest another dime from funds outside the business. She is a great entrepreneur! Mark, my other friend, just could [...]
As in any big purchase, buyer’s remorse is not so unusual in business-for-sale transactions. Buyer’s remorse should, however, dissipate after a month or so and the new business owner gets into the rhythm of the business. For purposes of this discussion, lets assume that the price paid was fair for all. When exploring a business for sale, one of the first questions a prospective buyer should ask is “can I be happy doing [...]
The prospective buyer and seller has a responsibility for understanding the business for sale. Or do they? The listing agreement said... The offer said... The various amendments said... The buyer or seller says: "but does it say this?" The wise broker will say at the very most: "My interpretation of the language is this....but you should check legal and accounting counsel." In a recent transaction the seller said, "I learned in my last [...]
Contracted valuation work
Excluding Companies Marketed for sale
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Selling twice or more the national average
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Service Work
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