So Your Valuation Isn’t What You Expected

Business valuation is the process that determines the economic value of a business unit or a company. Business owners get business valuations for many reasons, such as tax planning, estate planning, exit/entry of a partner, sale value, etc. A professional business valuation is admissible in a court of law to provide proof of the company’s […]

Why Excess Cash Impedes Your Growth

Cash management refers to the management of cash in-flows and out-flows. Company owners must maintain adequate cash to run their day-to-day operations and meet short-term obligations, so having cash on hand in anticipation of expenses is a good practice. However, how much cash should a company maintain? Can a company have excess cash? What Is […]

Business Practices to Build Long-Term Value

A business’ primary purpose is to maximize profit. The key ingredient to maximize profit is value creation. Entrepreneurs driven to build businesses for lasting success and profitability know the importance of value creation. Perception of value creation differs among stakeholders. Creating value for customers translates to higher sales of products and services, ergo higher profit. […]

Benefits of Recapitalization

Every company (public or privately held) funds itself with capital obtained through equity and debt. While equity refers to common stock and preferred stock, debt includes long-term borrowing via commercial papers, bonds, debentures, etc. The equation of the company’s capital formation (including equity and debt) is called the capital structure. Suppose a privately held company […]

What Makes a Merger a Success

Companies may be combined in two different ways: a merger combines two existing companies into a new one, and an acquisition is one company absorbing another. In either case, two or more companies come together to form a single entity. The majority of change agents and essential components of any corporate strategy, mergers, and acquisitions […]

Total Shareholder Return: What Is It And Why Does It Matter?

Business owners raise funds by inviting venture capital and private equity investments. Venture capitalists and private equity firms want to predict their return on investment, so they will calculate your company’s TSR (total shareholder return). As a business owner, you must understand TSR and how it matters. Total Shareholder Return Explained TSR helps gauge a […]

Strategize Your Exit Roadmap

When starting a company, entrepreneurs seldom prioritize an exit strategy. Unlike investors who generally seek a return on investment, business owners are primarily concerned with operating (and expanding) their businesses. This necessitates a thoughtfully prepared and implemented exit strategy to ensure the entrepreneur’s financial well-being after leaving the company and the investors’ profit. Business exit […]

How to Operate in a Virtual Business World

Communication and engagement with employees, clients, and customers are essential for smooth business operation. However, technological advancements have drastically changed modes of communication. From meaningful, personal exchanges between two people to quickly sending information to numerous parties across the globe, the forms and methods utilized to share ideas have progressed at an exponential pace within […]

Private Equity Recapitalization: What is it and how does it work?

Business owners find it very difficult to part from the companies they built. When discussing alternatives to exit their business, they often ask which is better: selling their business stake entirely or continuing to work with the company and benefit from its further growth. They may not know that they need not choose between selling […]

What Exactly Does a Business Valuation Imply About My Company?

Company owners who have no intention to transition their companies to new management any time soon often ask why they need a business valuation. Business valuation provides the baseline value of a company, the starting point from which you, as a business owner, may build a company with transferable value. Transferable value is what your […]