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Business Valuation

Business Valuation. Fabyelle Chevalier, CPA, CA November 14, 2013. AGENDA Business Valuation. What is it worth? Which factors affect value? Do you have an exit strategy? Selling your business Question period. BUSINESS VALUATION. WHAT IS IT WORTH?. ALLOCATING BUSINESS VALUE.

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Business Valuation

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  1. Business Valuation Fabyelle Chevalier, CPA, CA November 14, 2013 Client name - Event - Presentation title

  2. AGENDABusiness Valuation • What is it worth? • Which factors affect value? • Do you have an exit strategy? • Selling your business • Question period Small Business Solver

  3. BUSINESS VALUATION WHAT IS IT WORTH? Small Business Solver

  4. ALLOCATING BUSINESS VALUE Small Business Solver

  5. BUSINESS VALUATION WHICH FACTORS AFFECT VALUE? Small Business Solver

  6. TIMINGAnnual sales – assuming consistent margin Small Business Solver

  7. POSITIONING THE COMPANY • Capturing the seller-friendly attributes of your company • Identifying the opportunities that a new owner can leverage • Understanding the type of buyer who can best maximize your company’s value - justify a higher price Small Business Solver

  8. VALUE DRIVERS • Strengthening cash flow • Implementing cost controls • Reducing debt • Building the customer base • Improving inventory turnover • Enhance key employee loyalty • Settle ongoing litigation • Reliance on business owner • Economic conditions • Industry conditions Small Business Solver

  9. BUSINESS VALUATION DO YOU HAVE AN EXIT STRATEGY? Small Business Solver

  10. ONE DAY YOU WILL SELL YOUR BUSINESS Small Business Solver

  11. Small Business Solver

  12. BUSINESS VALUATION SELLING YOUR BUSINESS Small Business Solver

  13. MORE PREPARATION • Pro-forma financial statements • Non-operating expenses • Non-recurring expenses • Structuring the transaction • Assets vs. Shares Small Business Solver

  14. SALE PROCESS • Confidential Information Memorandum • Non-disclosure agreement • Expression of interest • Bid process • Contact with the key customers and suppliers Small Business Solver

  15. THE TRANSACTION • Involvement of owner post-closing • Earn-out or contingent payout Small Business Solver

  16. AVOIDING THE PITFALLS • Waiting too long to begin planning and preparation • Poor timing • Not making the company an attractive target • Not understanding the components of value • Focusing only on the income statement • Paying too much tax • Not retaining competent advisors Small Business Solver

  17. Small Business Solver

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