According to Divestopedia, “A valuation gap is the difference in the actual market value of a company and the value that the owner expects to sell it for to achieve his/her needs.” A value gap arises when a buyer bids less than the company’s estimated value or when the company’s current market value is less …
Value creation is not a one-person job. A company thrives with the collective support of its employees, the management team, and suppliers sharing a vision aligning the company’s fundamental goals with resources, operational structure, growth objectives, the workforce, and schedules. Sharing the vision with employees builds an effective team that works together to create value …
A business valuation reveals the company’s current market value (CMV), accurate data every business owner needs even when not planning to exit. Business valuation benefits companies at every stage of their life cycle. Knowing the accurate value of their companies helps owners better plan business and growth strategies. Business valuation also pertains to taxation purposes, …
After the Valuation: Create Value for Owners, Investors, Employees, Customers Read More »
Undoubtedly, the most valuable employees of any business are its owners. They are the foundation of the business. They are the organizers and operators and have taken on a financial risk above and beyond every other employee. Their expertise and experience are irreplaceable, with a value far beyond the amount of stock they own. If …
Funded Buy-Sell: Using the Insurance Option for “Buy-Out” Funding Read More »
GovCon stands for government contractor, a private company producing goods and services for public government agencies. The United States government is the largest buyer of goods and services globally, spending about $200 billion on procurement. This presents an excellent business opportunity for entrepreneurs to work with the US government. Government contracts help owners expand their …
Exit planning consists of three essential steps: collecting data, quantifying your resources, and evaluating exit options. The duration of exit planning depends upon your business, its current value, and the desired value for selling it. If your business doesn’t have the value to be sold for your desired amount, the process takes longer because one …
Have you ever wondered about the worth of your business? You’re not alone if you don’t know or only have a ballpark figure in mind. Business owners get so caught up in day-to-day business operations that they overlook the largest component of their wealth: the value of their companies. A formal business valuation helps you …
After the Valuation: Align Company Goals and Objectives with Value Creation Read More »
During times of financial turbulence, a business may require restructuring. A company with a high debt-to-equity ratio may re-purchase its shares from the open market, increase its price, and improve its equity ratio. Companies trying to avoid hostile takeovers or wanting to derail acquisition often issue more debt to reduce their appeal to buyers. Companies …
What is your company’s end goal? Business owners often have only a vague idea regarding their exit: they prefer running their business instead of planning an inevitable departure. However, every significant business event, including exit, deserves an efficient strategy to manage it. These strategies comprise a business plan. Your exit strategy is an essential component …
Owners considering exiting their business juggle several aspects of exit planning, from identifying the company’s value, getting financials in order, streamlining business operations, and negotiating the selling price to finalizing the deal. Business owners have their hands full, trying to manage all the facets of their exit plan, but the most crucial detail is identifying …
The Pros and Cons of Selling Your Business to Employees Read More »
