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 appeared in the May / June 2018 edition of The Value Examiner NACVA article click here
Topics: business valuations
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
If you have resolved to make your company more valuable in 2017, you may
want to think hard about how your customers pay.
If you have a transaction business model where customers pay once for what
they buy and do not return, expect your company’s value to be a low single-digit multiple of your
Earnings Before Interest Taxes, Depreciation and Amortization (EBITDA).
If you have a recurring revenue model, by contrast, where customers subscribe
and pay on an ongoing basis, you can expect your valuation to be a multiple of
Topics: Recurring Revenue