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From Inc magazine, online  http://www.inc.com/john-warrillow/when-growth-decreases-your-companys-value.html Please note, as you read this article, understand that the method of valuing a business can vary while the price remains the same or similar.  In my work at Dakin Business Group, we most routinely speak of discretionary earnings/cash flow to owner, not pre-tax profit as is mentioned herein. When Growth Decreases Your Company's Value By John Warrillow Top-line growth is great for your ego. But some types [...]

Reprinted from Divestopedia The #1 Reason Business Sellers Leave Chips on the Table By Scott Yoder, October 16, 2013 See Scott's profile in our advisor directory. Takeaway: We asked seasoned exit planning professionals how to avoid leaving wealth behind when selling a company. Their answers educated and inspired us. Source: flickr/Muffet I recently attended the Exit Planning Institute (EPI) annual conference. Besides the great presentations and the networking, I was fortunate enough to [...]

I went to visit with a business owner the other day and she mentioned that she was going to start ‘tucking in.’  What exactly was tucking in?  Does she have young ones or a sick parent at home?  What I learned… In this case the business was a printing company.  The printing industry does have some issues these days.  They are competing with non-print communication of teleconferences and e-commerce, as examples.  This business [...]

George has a great business, developed over 20 years.  He has a brand that consistently generates new and repeat business.  Now it is time to retire and a buyer for the business has been found but due diligence is not going well.  George used a bookkeeper and an accountant but himself is not very knowledgeable and the professionals perhaps not as excellent as they might be.  Plus, there were those cash transactions that [...]

Mary was working away at the retail store she owned with partner, Geri.  Geri typically did not come into the store as her role included buying and administering backroom responsibilities.  But, there she was announcing her desire to be bought out.  It was a total shock to Mary.  Certainly during their 10 year relationship there had been issues but they seemed to find ways to work through each problem. Geri and Mary were, [...]

It is not unusual for a new business owner to call and say, ‘Way too much, I want out.’  Often the entrepreneur did not fully realize the commitment to time, energy, and resources required by a new business, whether newly purchased or newly opened. These are three tips for a new business owner: 1)   Assess carefully up front not only the purchase price but also the working capital.  My practice has a great [...]

In keeping with the saying ‘if one is not growing, they are dying,’ many entrepreneurs find ways to expand their businesses.   A successful expansion can lead to a higher business value, when planned correctly.  When not strategically designed, it can lead to a reduced value. Recently a broker colleague wrote an article about such strategy.  He described how one business owner expanded to multiple offices, rather than expand the home office, risking the [...]

Sue had been operating her restaurant on the outside of town in a small rented location. She was doing well but knew that being in the heart of the city would be better. Sue had wisely earmarked only a portion of her savings for this investment, $50,000. She had been online and found the right new equipment and locally identified a craftsman to create the tables and chairs, carefully considered for cost and [...]

So, you want to sail off into the sunset, retire, do something different? A professional practice can have challenges that other businesses do not, when it comes to selling. Often a professional practice has more success embedded in the individual practitioner than, for instance, the owner of a retail store.  For this reason, buyers can be afraid.  Yes, afraid.  A wise buyer is one who pushes and pokes for the problems that might [...]