Business valuations – part 3

July 24, 2017

In the last post, I talked about the selection of the “multiple” in the relatively simply formula for valuing a privately owned business: Business value = Profit x Multiple The multiple broadly represents growth and risk. So what are the risk factors and how do they impact the selection of the multiple? Pretend you are...


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Business valuations – part 2

June 20, 2017

In the last post, I talked about the selection of “profit” in the relatively simply formula for valuing a privately owned business: Business value = Profit x Multiple So what is the multiple and where does it come from? The multiple represents a benchmark or comparison to another business that is similar. The multiple is...


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Business valuations – part 1

June 20, 2017

To paraphrase Tom Hanks from A League of Their Own, if business valuations were easy, everyone would do it. I would also need to find another job. Why is it that there are more than 3,000 accountants in Victoria and only 25 CA BV (Business Valuation) Specialists? Certainly the formula for valuing a privately owned...


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Measuring shareholder value

April 6, 2017

“Noise proves nothing…often a hen who has merely laid an egg cackles as though it were an asteroid.” Mark Twain We all carry on about whether a business is or should be making a profit. Simply monitoring profit gives you no idea whether shareholder value has been created. So why do we focus so much...


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Business valuations – solving illiquid investment in Geelong business

March 3, 2017

Private business as an investment Business owners should treat their business as an investment. Liquid assets are regularly revalued (property, shares, superannuation). We know how these are performing. A business ownership is illiquid. How is your investment in the business performing compared to: your other investments? last year? other businesses? A regular business valuation is...


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