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Buyers And Sellers Usually Have A Very Different View Of Business Value! |
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Most business owners think their business should be priced more than it's worth -- mainly because of all of their hard work over the years.
But they have to realize there are certain economics and realities that dictate the price. Besides the various methods of business valuation, the cash flow ultimately must provide the new owner a return on cash investment, ability to service debt and a reasonable salary for the owner and/or manager.
Unfortunately, too many business owners find major disappointment because the marketplace has not accepted their unrealistic asking price.
© 2011. Richmark Associates, Inc.
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Business Owners Must Take Advantage Of The New Technologies!
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Yes, it's overwhelming. There is so much new technology invading our world it can be hard to understand and realize its impact.
Business owners have to figure out what might help their businesses grow. Whether it be email campaigns, social media, e-commerce, more functional websites, cloud computing or new equipment, business owners need to embrace it.
Businesses that do not keep up with the new technologies may find their companies difficult to sell!
Click here for an excellent article on "Six Rules of Technology."
© 2011. Richmark Associates, Inc.
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Minimizing Income Taxes – Short Term Strategy Or Long Term Mistake?
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Many business owners and their accountants are absolutely fixated on minimizing taxes by showing no income. But this can be misguided planning for trying to get top dollar when selling the company.
Business owners need to realize that valuation is usually determined by a multiple of profits, or identifiable cash flow, and that banks make acquisition loans based on tax return results.
Reducing taxes can be a good short term strategy, but it might not pay off at the end!
© 2011. Richmark Associates, Inc.
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Business Owners Need To Understand Accounting!
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Many business owners aren't familiar with the principles of accounting. They need to understand their profit and loss statements and balance sheets so they can make good management decisions.
They also need to understand their financials when dealing with banks, tax returns and negotiating for the sale of their company.
If business owners don't have a background in accounting principles, they should consider taking basic courses at a local community or technical college. It can make a real difference in creating profits and maximizing the value of their company!
© 2011. Richmark Associates, Inc.
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Low Owner Energy, Low Company Performance!
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If a company is on a downward trend, many business owners think they can bring their companies back from a low business valuation that does not meet their expectations.
But it takes reinvigorated energy that many business owners find they no longer have. Very few companies can make that leap back to new heights without a strong drive, clear vision and robust leadership from the owner.
Sometimes it is best to recognize the reality of the situation and exit the business, passing it on to an energetic new owner, before it goes any further downhill.
© 2011. Richmark Associates, Inc.
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