Business Value

A buy/sell clause helps prevent business divorces from getting messy

A buy/sell clause helps prevent business divorces from getting messy

Business partners set up shop with the best of intentions. It’s a relationship that must be built on mutual trust and respect. But no matter how strong a personal or professional relationship is at the outset, shareholder conflicts and other events may occur that can affect the continuity of the business operations. A mechanism and …

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Reasonable Compensation

Reasonable compensation is a key assumption in the valuation model

One of the most subjective and discretionary expenses for many small closely held businesses or professional practices is owner compensation. Reasonable compensation is a key assumption in the valuation model as it can have the most impact on the profits of the closely held business. This is due to the fact that compensation recorded in …

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Restaurant Woes

Restaurant woes: Serving up a disappointing retirement outlook

It seems odd that a business owner would work his or her whole life on their business and then determine the business’s value based on what they “think “the business is worth, or an industry rule of thumb. If the sale of your business is going to fund your retirement you should know what your …

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Business Worth

Your business may not be worth as much as you think it is…yet

Do you know how much your business is worth? And by worth, I mean what price it would realize if it was for sale today. Many times small business owners think their business is worth more than it currently is. This is often referred to as the value gap. If your business represents a significant part …

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The Income Approach to Determining Business Value

The Income Approach to Determining Business Value

The income approach is often the primary approach used for valuation and is used in the valuation of most operating companies. The income approach discounts the expected future cash flows (returns on investment) to present value using an appropriate rate of return for the investment. Future cash flows are typically based on the net after-tax cash flows expected …

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Find out how much your business is worth.

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