Business Valuation for use in Merger and Acquisitions (Webinar Replay)

Business valuation in M&A or Business Sale Situations is a 20 minute webinar that explains what creates value when businesses are being prepared for business succession, business sale or acquisition or merger. This webinar is geared to accountants, CPA’s, valuation analysts, and other advisors who want to understand how to best assist their clients as they start to confront their client’s business succession and possible business exit situations.

You may want to download:  How To Value A Business for M&A, Succession, or Business Sale Purposes – Slide Set

Topics covered include proven negotiating strategies, value creation, timelines, etc.  This webinar will help owners, valuers, financial planners, lawyers, and other advisors better understand differences between valuation for other purposes and when the purposes is for planning for a business sale. The webinar further describes key steps to prepare a business for sale.  The webinar was part of an “Around the Valuation World” broadcast.  Greg Caruso, a Partner at Harvest is Editor in Chief of “Around the Valuation World” which is produced by the NACVA.


 

Clients choose Harvest Business Advisors for our accurate business valuations and our consistent ability to deliver a high price as part of a smooth exit transaction.
Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com or 443.334.8000 to discuss selling your business, ordering a business valuation or buying a business.

Pre-Sale Due Diligence when Selling Your Business

You never know when you might sell your business therefore you should always be doing due diligence so you are prepared to sell your business when the time comes.  In fact, continuing internal due diligence should just be a part of your businesses operating procedures. 

If you are Considering Selling Your Business? Please click here for a downloadable e-book, “ 10 Ways to Increase the Value of Your Business“.

Vasilios Peros,Esquire (www.peroslaw.com) recently wrote an article on the importance of pre-sale due diligence when selling your business.

There are many reasons why you might not know when you are going to sell your business including:

  • Health reasons for you
  • Health reasons for a loved one
  • Loss of larger clients or changing market
  • Loss of key people
  • Surprise offer that might make sense
  • Need to re-capitalize
  • A growing aversion to risk
  • “Just Can’t Take it Anymore”

Mr. Peros states, “In conclusion, pre-sale business due diligence is critical to achieving a high sales price and favorable terms.  Surprises resulting from a potential buyer’s due diligence can be detrimental.  Accordingly, pre-sale preparation and due diligence should be made a part of normal operations of a business.  With some budgeting and planning, issues identified can be resolved over a period of time and not at the last minute before a sale.   The outside advisors of the business can perform many of these pre-sale diligence tasks, allowing owners to focus the majority of their time on running their business.”

Click here for full article on due diligence when selling your business.

Greg Caruso

Harvest Business Advisors

Business Brokerage  |  Business Valuation

Maryland  |  New Jersey

Be the Next Property Brothers, Design Build Remodeling Business for Sale in Maryland

Maryland Business for Sale by Columbia, Maryland Business Broker.  Residential remodeling business for sale in Maryland.  Jobs from Potomac, Maryland to Towson, Maryland.  Big pipeline, backlog for re-modeler that has all systems in place and track record to prove it. Build custom quality kitchens, bright sunny sun rooms, generous family rooms and more. General Manager and key people including sales will stay.  This Company design builds residential remodeling projects and additions throughout the northern DC suburbs into the north/west/south suburbs of Baltimore. Average job size in 2014 is approximately $100,000.

2014 results had almost $2,000,000 revenues with over $300,000 Cash Flow.   2015 sales pipeline is off the charts.  Seller is motivated.  Contact broker below for up to date backlog information.

To contact business broker, Greg Caruso email gcaruso@harvestbusiness.com

 

Clients choose Harvest Business Advisors for our accurate business valuations and our consistent ability to deliver a high price as part of a smooth exit transaction.
Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia.
Connect with us at info@harvestbusiness.com or 443.334.8000 to discuss selling your business, ordering a business valuation or buying a business.

How to Sell a Construction Contracting or Sub Contracting Business for the Highest Price

Every construction contractor (or construction general contractor, construction sub-contractor, construction specialty contractor, HVAC, plumbing, mechanical, mill-work, miscellaneous metal, structural steel, concrete, etc) has a magical number in their head.  “Your Number”

This number is the future business sales value of their business when you want to turn the business over to your kids or sell to managers or third parties.  For most people this number is a fantasy but a few owners will do the work and make the changes to obtain their Number.  This report is for you few who are willing to take the ACTIONS necessary to implement a construction contractor exit plan or construction contractor succession strategy.

Want to know more about building value and selling your construction company – Click here to download our e-book, “A Contractors’s Guide to Contingency and Succession Planning”. 

THE PROBLEM / OPPORTUNITY

Simple facts:

  • Less than 25 % of all businesses are sold.  The rest are closed and liquidated
  • Of businesses with $2.5 million to $10 million in revenue 35% will sell
  • Of businesses with $10 million to $50 million in revenue 50% will sell

While I do not have data I would contend that construction contractors (and sub-contractors) have even worse results with their business exits and successions.  This is because construction contractors tend to be personality driven, have thin management, and often have bonding requirements all of which reduce the pool of qualified buyers.

But, for those few who do the right thing and get their sale right the rewards are tremendous.   You can get, “Your Number”.   In some cases it is the difference between $5 million and $15 million dollars of sales value.  Or shutting down and trying to collect receivables or selling for $3 million.  Let me demonstrate below.

 

A true example:

Magnificent Plumbing has $20 million of revenues.  They have a 75% Cost of Goods Sold or $15 million.  They have a $3 million overhead and administrative cost.  They have $2 million profit.  For our purpose here  we will use a multiplier of 5 so the company is worth $10 million.  A nice going away gift for the owner.  But Magnificent Plumbing’s owner is tired and not really paying attention.  Over two years sales fall a little over 20% to $16 million.  Happens all the time.

Now, what happens to the bottom line? (What you sell!)  The cost of goods sold stays 75% or $12 Million but overhead and administrative barely go down at all and are still at $3 Million (sound familiar?)  Total costs are now $15 million, profits are $1 million and the value (5x) is now $5 million  Generally this is when owners decide to sell.  When the company is worth $5 million.

But, this is the exciting opportunity:  What if the owner focused hard with the intent of creating as marketable a company as possible?   What if they increase sales by 10% instead of having sales drop by 10% each year?  Now at the end of two years the company revenues are $24 million, COGS is $18 million, and having kept overhead tight it is still at $3 million making profit $3 million.  Now the company is worth $15 million.  Now go to market.

The difference between where you are today and where you want to be is your Gap.  The question is how do you close your gap and Get Your Number?

Simple – Construction Contractor Strategic Exit and Succession Planning followed by ACTION.

Would you rather plan your sale?

The choice is yours:   Work really hard for a few years at the right time and receive $15 million for your contracting business or wait too long, sell at the wrong time and get $5 million.  And remember, $5 million is a great sale compared to most owners who wait even longer and get nothing.  Nadda.  Zippo.

So do it right, get Your Number and enjoy Florida or wherever really works for you.  Do it wrong, struggle to pay your bills as you close and sit on your very old couch.  Which would you choose?  Of Course – Your Number.


Clients choose Harvest Business Advisors for our accurate business valuations and our consistent ability to deliver a high price as part of a smooth exit transaction.
Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia.
Connect with us at info@harvestbusiness.com or 877-838-4966 to discuss selling your business, ordering a business valuation or buying a business.

 

Profitable Systematized Remodeling Contractor for Sale by Harvest Business Brokers

Business Sale / Merger Opportunity – Residential Remodeling Contractor
Own a Company that has all systems in place and track record to prove it. Build custom quality kitchens, bright sunny sunrooms, generous family rooms and more. This Company design builds residential remodeling projects and additions throughout the northern DC suburbs into the north/west/south suburbs of Baltimore. Average job size in 2014 is approximately $100,000.  This business is valued for sale at an asking price of $899,900.00.

email gcaruso@harvestbusiness.com for more information.

This Company operates in the following Counties; Montgomery County Maryland, Prince Georges County Maryland, Howard County Maryland, Carroll County Maryland, Frederick County Maryland, Harford County Maryland, Baltimore County Maryland.

 

Gregory Caruso
Harvest Business Advisors
Business Brokers, Business Valuation
Baltimore – Columbia Maryland Business Brokers
Princeton New Jersey Business Brokers
609-644-7955