building business value Archives - Your ExitMap

Purpose After the Sale

John F. Dini — Mon, 04 Mar 2024 17:08:53 +0000

Purpose after the sale is one of the biggest challenges for an exiting owner.

Purpose – “Having as one’s intention or objective.”

Many exit planning advisors discuss the three legs of the exit planning stool – business readiness, financial readiness and personal readiness. In our previous two articles, we focused on two of the “big three” components of a successful life after the sale, activity and identity. The third is purpose.

So many advisors point to the 75% of former owners who “profoundly regret” their transition, and say it’s because they didn’t make enough money. To quote Mr. Bernstein in the great film Citizen Kane, “Well, it’s no trick to make a lot of money…if all you want is to make a lot of money.”

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Focus On Net Proceeds And Not Just Sale Price When Selling Your Business

Pat Ennis — Tue, 25 Apr 2023 15:06:13 +0000

John was excited as “today is the day!” Twenty-five years ago this month he had started his home remodeling business with a truck and a tool belt, and today at 3pm he was going to the deal table to sell his business to a much larger remodeling company. It would be a strategic purchase for the buyer who was willing to pay a premium with a goal of expansion in the region. With the check received today, John knew he could now do everything he and Kim had thought about doing for years — travel, more time with the family and for hobby’s and other ... Read more

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Impressions of Value in Exit Planning

John F. Dini — Tue, 18 Apr 2023 13:24:16 +0000

Business owners, advisors, and buyers frequently have widely different impressions of value when it comes to a business. The Pepperdine Private Capital Markets Survey canvasses intermediaries who sell privately held Main Street and mid-market companies. One question is about the obstacles that prevented the sale of a business. The number one response is “Owners’ unreasonable expectations of value.” That may be self-serving or an excuse. Nonetheless, valuation is a sensitive subject. Many owners have worked in the business for 30 or 40 years. They assume it will fund their next 20 years of retirement. Their target price is set only by their desired lifestyle after ... Read more

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How to Separate Yourself From Your Business – Why It’s So Important

Todd Jarvis — Tue, 27 Sep 2022 14:51:58 +0000

When you run your own business, oftentimes one of the most confusing aspects of the job, especially if you are new to the experience, is understanding how to separate yourself from your business. And this issue can show up in so many ways, from achieving a work/life balance and managing your time to how you get paid and even how much taxes you owe. With this in mind, here we will offer a big-picture overview of this issue, and in future articles, we’ll drill down to some of the finer details of keeping your business and personal assets separate. Although it might not seem overly ... Read more

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Will You Be Ready?

Jan Graybill — Mon, 28 Jun 2021 14:34:45 +0000

Will you be ready when it is time to leave your company? A business owner needs to have a basic business strategy to monitor company financials regularly. Several owners consider this a strategy to prepare for exiting their businesses. However, monitoring company financials is like looking in the rearview mirror. What if you could incorporate a business strategy that looks forward and leads to accelerating profitability and increases business value? In addition, this strategy helps lead to less stress, more free time, and ultimately helps take control of a business exit? The Active Strategy The Business Strategy is called Exit Planning. John H. Brown, author ... Read more

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Internal Leaders Affect the Value of Your Business

John F. Dini — Fri, 12 Mar 2021 16:34:26 +0000

Internal leaders may not be obvious. They may not even have a “leadership” title. Make no mistake, however; internal leaders are critical to value and attractiveness when it comes to selling your business. In Super Bowl 55 we saw the impact of an internal leader. Tom Brady has the highest winning percentage of any single athlete in major professional sports. The Tampa Bay Buccaneers have (or at least did up until this season,) the worst win/loss record over their entire existence of any major professional sports team. Yet one man changed the culture of the organization almost overnight. Remember, for all the accolades being heaped ... Read more

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Exiting a “Time and Place” Business

John F. Dini — Sun, 19 Mar 2017 10:32:32 +0000

“The purpose of middlemen in the marketplace is to provide time and place utility.” I remember the light bulb going on in Economics 101 when my professor said that. Suddenly, I understood the concept of added value. Someone had to get the product to the customer. “After all,” the professor continued, “The footwear manufacturer in Massachusetts can’t sell a pair of shoes directly to someone in California. They can’t manufacture and handle thousands of customers. It would be a nightmare, and completely unprofitable.” The fact that Massachusetts was still known for shoe manufacturing gives you some idea of how long ago this took place. So long ago, ... Read more

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What is Your Company Worth? II

John F. Dini — Sun, 06 Oct 2013 15:16:56 +0000

Last week we discussed how business owners frequently use hearsay or incomplete information to estimate the value of their companies. They give the number to their financial planner, or include it on a personal financial statement for their banker, neither of whom bat an eyelash at the estimate. Having the amount “accepted” by financial experts, the owner starts to treat it as fact. How do you know whether it is realistic or achievable? Valuation of a small business is a combination of art and science. No two small companies are alike. A multiple of profits or cash flow is only the starting point. Take two small companies, ... Read more

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