transition-planning-yumpuu

MORE THAN EBITA
EBITA plays a significant contribution to the business valuation
however there are multiple other factors that can make a considerable
difference to the outcome.
Today, up to 80% of a firm’s value can be associated with intangible
assets, such as brand, reputation, culture, customer satisfaction, human
capital, risk management, R&D pipelines and a company’s trading
license to operate.
“
There is gold and abundance of costly
stones, but the lips of knowledge
are a precious jewel.
- Proverbs 20:15
“
EXTERNAL VALUE DRIVERS
When taking your business to market, it is important to consider the
external value drivers:
• Economic factors
• Strategic buyer synergies
• Recurring revenue
• Competition from buyer groups
• Innovation & IP: proprietary technology, trademarks, patents, etc
• Transition timeline for existing management
Each of these factors can substantially increase the final selling price for
the benefit of the seller.
IT’S COMPLICATED
Selling a private company is not just about finance, accounting or legal
matters. It is a team effort that is dependent on sales and marketing to
ensure the best value.
A marketing strategy is critical to the sale process primarily because it
will enable multiple bidders for the sellers business which will ensure
they obtain maximum value for your clients’ years of hard work.
AVOIDING THE PITFALLS
Traditional approaches for selling a business involves little sales or
marketing activity. There is an over reliance on “word of mouth” and
networking connections from third party advisors. As a result, the client
often does not achieve optimum price, value, or terms - referred to as a
“short sale”.
“
“
We are in danger of valuing most
highly those things we can measure
most accurately, which means that we
are often precisely wrong rather than
approximately right.
- Sir John Banham
Money, which presents the prose of life,
and which is hardly spoken of in parlors
without an apology, is, in its effects and
laws, as beautiful as roses.
- Ralph Waldo Emerson
“
“
“If you are considering selling your business with the plan of
being out in 3 to 5 years, the best time to start the process is today”
TRANSITION PLANNING GUIDE
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