The Smart and Savvy Exit - Business Valuation - Ellen McIlhenny

Ellen McIlhenny - “The Smart and Savvy Business Exit”
 
PROFIT RADIO..."Grow With Us"
Introduction
This week’s show we will talk about the business valuation whether it be early in your exit process or right before you put your business on the market.  This can be a confusing thing because first of all there is not just one method of valuation.  And There are many factors involved in coming up with the best method to use.  These can range from industry, size of your company, market conditions and even who you are targeting as the best person or company to buy the business. 

​Last week I told you a little about my background.  I was the CFO of a company that had a period of huge growth both organically and through acquisition. I had a lot of fun with the acquisitions because I was responsible for a lot of the due diligence when evaluating companies to buy.

One thing that I became painfully aware of during that time was that most of the business Owners that I have come in contact with unless they have had a valuation don they have no idea what their business is worth. And what is sad is that their perception of value is almost always much more.  Meaning that guy or gal who have been working in their business for twenty thirty years and decided to sell thinking they will spend the next thirty years living off the proceeds are oftentimes disappointed to find out that they will be working for several more years because many times 90% of a business owners worth is tied up in their business. That was a big factor in my decision to leave corporate life, so I could start working with these business owners and to be on the other side of the table so to speak. That and the fact that like many entrepreneurs – I can’t stand people telling me what to do.
 
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​Show Objectives
By the end of our time together I hope you will understand the importance of having your business valued. There are various reasons for a valuation and we will discuss those. There are also various methods used and you will need to determine which are most appropriate for your business.
 
https://www.ibgr.network/show_notes/the-smart-and-savvy-exit-the-exit-plan-ellen-mcilhenny

Or you can listen to last week’s show on episodes 17 through 20.
https://studio.podcast.co/ibgr/future-financial-confidence-with-ellen-mcilhenny/episodes

Key Issues - ​Owner/Manager Perspective:
Why do you need a valuation?

1. Retirement Planning
2. Financing
3. Divorce
4. Partnership Buyout
5. Bankruptcy

What You Need to Know
What are the different types of valuation?

1. The Market Approach
2. The Income Approach
3. Asset Based Approach

What You Need to Do​
Who will do your valuation?

1. Certified Valuation
2. Estimate of Value
3. DIY

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

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