Small companies are the innovators. The need for large companies to acquire small companies is necessary in order for the former to capture new products and services. According to Fortune magazine, “Big companies almost never innovate. This is unfortunate because…
The median sales of a company going public has gone from an average $15 million in 1999 and 2000 to $164 million in 2004. Smaller companies have decided not to go public as often as in years past, and they…
In most jurisdictions, a board of directors is not required for privately held companies. However, many of these companies have appointed what might be termed advisory boards. Although they may not have any legal authority, owners of these privately owned…
The deal is getting down to the wire, the price differential is close, but the parties are not yet in agreement. Following are some ideas that might get the ball rolling and help bring the parties together. Let the seller…
A recent article in M&A Today offered some observations concerning current and future M&A trends. “The business world is constantly changing. For the first half of the 20th century, vertical integration was the objective in which, oil companies, for example,…
We suspect that the answer to this question depends on who you ask! The Internal Revenue Service (IRS) reports that they received some 24.8 million business tax returns for the year 1999. We can hear the joyful sounds emanating from new business…
Here is a common and much-used breakdown by the federal government: Small Business Administration (SBA): Very Small Business = 19 or fewer employees Small Business = 20 to 99 employees Medium-Size Business = 100 to 499 employees Large Business = 500+…
1. Start with the business – Value Drivers: Size, growth rate, management, niche, history – Value Detractors: Customer concentration Poor financials Outdated M&E Few assets Lack of agreements with employees, customers, suppliers Poor exit possibilities Small market Potential technology changes Product…
“There are many reasons for valuing an entity, and those circumstances can lead to different outcomes…For instance, a business’s value for sale on a going-concern basis will differ from its value for liquidation purposes. It similarly makes a difference if…
Many courts and the Internal Revenue Service have defined fair market value as: “The amount at which property would exchange between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having…
Is there pricing elasticity? What’s proprietary? What’s the company’s competitive advantage? Status of employment agreements and non-competes? Post-Acquisition: Are there cost savings after purchase? Are there significant capital expenditures pending? Is there synergy with the seller? Is it perceived the…
What is the value of your business? There are many ways to approach that question — based on complex formulas or just a good hard look at the balance sheet, but no answer based purely on numbers is going to…