By Kathlene Thiel, MBA, CVA, M&A Master Intermediary<\/p>\n
a business owner, you may have an idea of what you think your business will sell for, but we find that an owner\u2019s expectation of value is typically much higher than an outside buyer would pay or a bank would finance.<\/p>\n
A potential buyer\u2019s (and banker\u2019s) perception of value is based on the expectation of future cash flows. That is calculated from the historical financial performance of your company; not your idea of what a buyer could do if they purchase and grow your business.<\/p>\n
To build value, avoid these deal killers:<\/p>\n
Focusing on Minimizing Taxes – In an effort to reduce income taxes, you may be purposely driving down profits by running it as a \u201clifestyle\u201d business with lots of discretionary (personal) expenses run through your company. While it may reduce taxes it also drives down the value of the business.\u00a0<\/span><\/p>\n <\/span><\/span><\/b><\/span><\/span>Driving Revenue Instead of Margins – Don\u2019t assume that simply increasing revenue will increase business value. Gross profit margin and net profits are the major drivers of business value.<\/p>\n Ignoring Business Risk – Potential buyers are seeking quality businesses that are scalable, transferable, and have little risk. And the price they are willing to pay is largely a reflection of their perception of that risk.<\/p>\n ThielGroup is a business advisory service providing brokerage, M&A, and valuation services in upstate New York and New England. Interested in discussing how we can help you sell your business? Give me a call. I have been selling companies for over 20 years!<\/p>\n","protected":false},"excerpt":{"rendered":" By Kathlene Thiel, MBA, CVA, M&A Master Intermediary a business owner, you may have an idea of what you think your business will sell for, but we find that an owner\u2019s expectation of value is typically much higher than an outside buyer would pay or a bank would finance. A potential buyer\u2019s (and banker\u2019s) perception […]<\/p>\n","protected":false},"author":89,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-40732","post","type-post","status-publish","format-standard","hentry","category-business-news"],"yoast_head":"\r\n