Monthly Archives: September 2015

What’s your business worth?

Article by Eric Purvis, Director of TAA Planning.

 

 

 
Methods of valuation compared
Empirical research conducted by the Pepperdine Private Capital Markets Project indicates that approximately 40% of all companies that are brought to market do not result in a transaction, with the largest reason for failure being a value gap in the expectations between buyer and seller. (Kenneth J. Sanginario, The Value Examiner, Nov/Dec 2013)

You’ll be reading this article because you are interested in understanding the value of your business. You may want to exit, free up some time, sell, or enter into some kind of agreement with another business – or you might be looking at bank finance. Whatever the case, you want to know your business’ true value, right?

Obviously the first step in understanding how to liquidate, leverage, or build value is establishing a baseline. This means you’re going to need a detailed business valuation. Owners often think they know their company’s value, but in reality they’re shockingly off the mark.

A business appraisal firm surveyed 2,000 business owners and found that most misjudged the value of their businesses by 50% or more — and sometimes by millions of dollars. Worryingly, over half of business owners overestimated the value of their companies. The major problem this can cause is that people embarking on any kind of venture, growth strategy, or exit, are banking on a certain amount of financial capacity. But in fact, they are sometimes significantly overestimating this capacity.

The methods most commonly used to establish a business’ value are:
Current marketplace […]

September 21st, 2015|Business Learning|

Your crack team – 5 experts you need

Article by Eric Purvis, Director of TAA Planning.

 

 

 
Your crack team
… 5 experts you need for your business strategy
Whether you’re growing your business’ value and profitability because you want to sell it, make acquisitions, or expand your empire, the stakes are high when you begin to ponder how and when you’re going to kick off your strategy. You’ve essentially got two goals in mind:

Maximising your company’s value, and
Ensuring you accomplish your business and personal objectives.

To make sure that you build, grow or exit your business on your terms, and capture all of the value you’ve created in your business, you need to be proactive – not reactive. Think ahead and gather your team. I’m talking two to three years ahead, if possible, especially if you’re planning to exit.

Choose a team of advisors who can and will help you make this change in your life as smooth and as rewarding as possible. You should also understand that growing your business is a multi-disciplinary endeavour. Only a team of professional advisors will have ALL of the expertise needed to design a comprehensive, integrated Growth Plan with all its associated goals and strategies.
Your crack team

As a headstart, I’m going to tell you exactly who you need on your team and the one-word reason why you need that individual.

A business coach – Accountability
A solicitor or legal advisor – Compliance
A financial advisor or wealth management professional – Maximise
A tax specialist – Minimise
An insurance professional – Protect

What about the cost?
Nobody likes to pay unnecessary fees, but the cost […]

September 10th, 2015|Business Learning|