Most business owners don’t assess the value of their business until they are contemplating a sale. There are significant benefits to determining the value of your business well in advance of a sale, including:
Planning for strategic growth,
Developing a succession plan,
Establishing financial controls,
Creating a long-term sales plan, and
Obtaining bank financing or alternative investments
Finding accurate, comparable data is difficult for owners because most M&A transactions are done on a private and confidential basis. You could call your CPA but they lack industry knowledge so their approach to value may not be appropriate. That is where Kaulkin Ginsberg Company, and its sister company, Topline Valuation Group’s, strategic valuation assessment (SVA) comes in to play.
Our SVA is aimed at providing accounts receivable management (ARM) business owners the ability to assess the value of their business by providing them with an understanding of value relative to current market conditions. By putting your business through an SVA, and doing so well in advance of a potential sale or succession, you will be better positioned to maximize your company’s value and realize your desired outcome when it comes time to transact.
Our experts will evaluate your company’s financial and operational performance relative to economic and industry market conditions and:
Review historical, current, and projected financial and operational performance from the perspective of a buyer;
Analyze the business’ enterprise value in today’s market relative to proprietary transaction and market data;
Examine critical documents to get together in advance of a sale and review for any potential issues;
Explore business factors that add to or detract from value, and offer ways to enhance value;
Monitor the company’s performance throughout the years leading up to a transaction; and
Update ownership on market conditions and changes influencing value.
Things you can do now, on your own, at no cost
There are certain documents that all owners should have in place before engaging in discussions with perspective buyers. These include a complete set of historical financial statements for the past 5 years, a current year-budget to actual statement, a projection for the next 2-3 years with assumptions, an updated client and prospect list, client contracts, a current organizational chart, articles of incorporation, partnership agreements, insurance policies, lease documents, vendor contracts, and employment contracts (if they exist).
Our experts are available to help you prepare the following documents from the viewpoint of a perspective buyer:
Client contribution reports,
Sales pipeline,
Multi-year forecast with a rock-solid basis of assumptions, and
Normalized (or adjusted) income statement to reflect the true profitability of the business
The SVA will enable you and your partners assess the value of your business and to make a well-informed decision, whether it be to sell the business now or at some point in the future, position it for succession, or focus on improving profitability. Our experts will leverage the assessment to evaluate your company’s strengths, identify weaknesses and threats, and provide recommendations on opportunities to grow value. By mitigating risks related to factors outside of the companies control and improving on those within its control, your company will be positioned for success – regardless of the route you choose.
Regardless of your desired outcome, our team of professionals is prepared to work with you to ensure that the business is well positioned to maximize value. Please contact us here or email us at HQ@kaulkin.com for a free and confidential consultation.