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Understanding the Relationship Between Risk and Earnings Multiples
What is the relationship between risk and earnings multiples? When assessing the value of a business, one of the key factor's investors consider is the earnings multiple. This multiple is a measure of how much investors are willing to pay for each dollar of a...
The Motivation Behind Business Selling
It's easy to assume that business owners selling their ventures are simply looking to cash out, the reality is often quite different. The distinction between wanting to sell and needing to sell. Wanting to Sell: Many entrepreneurs dream of building successful...
In the Selling Process, the Shorter the Timeline – THE BETTER
In the selling of any business, especially in times of a volatile or uncertain economy, speed is of the essence. Faster is always better and can radically improve the likelihood of success.The total process of selling a business can take anywhere from two months to...
Zero or Negative Cash Flow
Valuation 101: when a business has a zero or negative cash flow – what is the value? The value of a negative cash flow business reverts to the hard assets: Property Buildings Equipment Trucks Machinery Furniture Fixtures What you don't know can be costly – we help...
Step by Step Process of How to Use the Discounted Future Earnings Method.
To calculate the value of company ABC using the discounted future earnings method, we need to follow these steps: Step 1: Calculate the average annual growth rate. The short-term growth rate is 7%, and the long-term growth rate is 3%. We need to calculate the average...
What do I do if I sell my business and I owe money?
The type of sale and structure of the sales agreement will determine the answer. If you enter into a stock sale – the buyer is purchasing the business entity and all that comes with it – including liabilities. The corporation operates under the same...
11 Characteristics of the “Perfect Business”
What everyone wants to know.
Common Mistakes When Buying a Business!
Are you considering buying a business? It's an exciting venture that can lead to great opportunities, and I believe the best way to achieve financial independence and build wealth in the US. It's important to be aware of the potential pitfalls along the way....
Selling to Private Equity – the Good and Bad
Attention business owners! I get this question ALL THE TIME, are you considering selling your business and wondering about the benefits and drawbacks of engaging with a private equity buyer? Let's dive into it! High level – all the talk is about private equity, but...