The recent stock market corrections caused me to think about what’s coming for private business owners, especially those who are part of the baby boomer generation. Public businesses and private businesses do not fluctuate in value synchronously. Investors in public businesses try to anticipate the future and the value of the business will change quickly. Private businesses are affected more by the current economy, which means there is a lag until the economy impacts the business during an actual recession.
This article is the first in a series designed to help staffing company business owners get a better understanding of the current M&A market and terminology. Although the term “multiple” is commonly used in business valuations, this article is intended to provide some additional clarity to the concept.
This article appeared in the May / June 2018 edition of The Value Examiner NACVA article click here
Topics: business valuations
Much is written about “value drivers”; strong financials, recurring revenue, desirable industry, scalability, impressive customer list, intellectual property, etc. However, I think of value drivers as almost prerequisites to attracting buyers for lower-mid market companies. But eliminating “value detractors” is frequently even more important to buyers because it helps minimize risk. In my opinion, the top two value detractors are: 1) owner dependence and 2) customer concentration.
There is no denying the Baby Boom Generation (people born from 1946 to 1964) have made a significant impact on society. From infancy on, Baby Boomers have changed perceptions on everything from child-rearing to retirement. These changes have helped boost the economy of every decade since the end of WWII. And now, the Boomers are about to have another impact, although this one may not be so positive.
Topics: exit planning
Most business owners fail to realize they must plan for the sale of their business. According to recent statistics, only 20-33% of business complete the sales process. A study conducted by ROCG, a company that specializes in business transitions showed 84% of the respondents to their survey indicated that the proceeds from their transactions were essential to their future.
Topics: selling business action plan