Like any small business owner, you want to know how much your business is worth. Once you receive an estimate, the next question may be, “how was this calculated?” A multiple is a number you would use when calculating the value of a business.
In a study conducted by Massachusetts Mutual Life Insurance Company (MassMutual), 70% of entrepreneurs think about the value of their business on a regular basis. However, they don’t always have precise knowledge of what the actual business value is.
Preparing to sell your business can be an emotional rollercoaster ride, and the last thing you may consider during this time is selling your business to a competitor.
In the spring of 2020, I heard a story on the radio about baby boomers that want to retire yet are struggling with exiting their small businesses. As an entrepreneur, this struck me as odd – how can this be an issue? A few hours later I was searching online for more information and was shocked at the magnitude of the issue.
Seller’s Discretionary Earnings is also referred to as Seller’s Discretionary Cash Flow, Adjusted Cash Flow, Owner Benefit, Recast Earnings, or Normalized Earnings.
Ideally, as an owner, you want to ensure your business is not undervalued when the time comes to exit the business while a buyer doesn’t want to pay an inflated price. To achieve this, comparables are an excellent way to estimate the fair market value of your business.
Due diligence is the process where the buyer has an unveiled look at the business you’re selling to investigate it from the inside so that they can make an objective decision about your business, and make a buying decision or not.
Most small business owners aim to sell their business someday. According to a PNC Bank survey, 78% of owners plan to sell their business to fund between 60% to 100% of their retirement.
“At that point, I realized that I was going to have to tell the employees.” You might have put...