Episode A5.006 Conduct business valuation for sale

Introduction

Today’s show is building on our previous five shows.  Last week we talked about optimizing all elements of the business for profitability. This week we will talk about the business valuation prior to the sale of the business.  Obviously,  the better we implement the tools we learned last week the better you are going to feel about the valuation.  Valuations can be confusing because there is not just one method of valuation. There many factors involved in determining the best method to use.  These factors can range from industry, size of  your company, market conditions and even who you are targeting as your best buyer.

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Show Objectives - The Why
By the end of our time together you will hopefully know a little more about the valuation process and the different types of valuations and when those types are used;  then discerning what is best for your business.

Key Issues - Owner Perspective:

1. There is no precise value for a business. Subjective
2. Price and Value are not the same. A valuation can be used to negotiate
3. Valuations are as of a certain date. Salability depends on many factors 

What You Need to Know - The What

1. The Non-Disclosure Agreement.  Owners are often uncomfortable with the information requests
2. The information Checklist
3. The interviews

​What You Need to Do​​ - The How

1. The valuation types
2. Who should conduct the valuation?
3. The self valuation

Shows

• Previous: EPISODE A5.005 Optimize All Elements of the Business for Profitability
• Next: Episode A5.007 Audit the business to identify where to increase value and not reduce prices in the future

Written by Ellen McIlhenny - CFO Plus Services - cfoplusservices.com