Around the Web: A Week in Summary
A recent article from Inc.com entitled “5 Benefits of Getting a Business Valuation” explains the reasons why a business owner should get a valuation if they have not within the past 12 months.
Knowing what your business is worth is invaluable information for an owner to have. At least once annually, it’s a good idea to have a business valuation performed on your company for these reasons:
- It will give you a better knowledge of the company’s assets. Guessing is not only inaccurate but not useful in important scenarios such as obtaining lending or insurance.
- To have a good understanding of your company’s resale value. Whether you’re planning to sell or not, knowing this figure is instrumental in managing the future of your company’s value.
- Allows you to obtain a true value of your company. This matters because it allows you to compare company growth in the future.
- Makes life easier during a merger or acquisition.
- Gives you access to more investors.
A recent article from Axial entitled “Small Deals, Big Returns” examines multiple market reports to determine whether larger, mid or smaller sized buyout firms generate the best returns.
While it was popular to focus on large buyout deals in the 1980s and 1990s, the focus has recently shifted to middle market companies. According to the data provided by multiple reports, the switch in focus has proven to be a good thing for private equity funds. In general, purchasing multiple smaller businesses over time produces a larger payout than searching for fewer large deals.
A recent article from Accountancy Daily entitled “Succession Planning for Business Owners” discusses the role that accountants play in the succession planning process.
Succession planning is an emotional process for many business owners. A trusted accountant who is experienced in the process can be instrumental to a business owner’s peace of mind and success. Here is how an accountant can be most helpful during each stage of succession planning:
- Developing an Exit Strategy – Being there to mediate any emotional decision making as well as to prepare the business owner for what to expect from the process. Once the owner is settled with these things, the accountant should work with them to determine the who, what, when and why of the sale.
- Preparing the Business for Sale – An attorney can advise on what needs to be patched up within the business and the ways the business owner can do so before passing it along to the next owner. This is also the time to discuss ways in which the business owner can increase the value of the business before selling.
- Selling the Business – Having a network of business brokers and lawyers to refer a business owner to when they are ready to sell can be extremely valuable. Accountants can take it a step further and prepare their client for what to expect during this next stage of the process.