Business Valuation and Selling a Business
Business Valuation Overview
Most business owners have invested countless hours and dollars into making their manufacturing business successful. Often, multiple generations of a family have dedicated the best years of their lives. Risk and hard times lead to sleepless nights and a few grey hairs. So emotionally, the value of that business is simply priceless. But every business owner knows that it is important to know your current fair market value for tax reasons, asset purposes and of course when talking with a potential buyer.
Do not make the mistake of over-simplifying the valuation process. Owners who use formulas like 1.5 times revenue or 3 times cash flow may be making a costly error in business decisions. Catalyst Connection has partnered with River’s Edge Alliance, independent, certified, third-party valuation experts. They will perform a complete fair market valuation and provide you with a copy of their analysis, comprehensive business valuation report and conclusion.
Fair Market Valuation
The first step is understanding the current “fair market” value of your company.
This process includes:
- Analysis of the last three fiscal year-end financial statements and interim financial statements to determine financial trends.
- Interviews with you and any other necessary employees, consultants, or advisors to understand the true operating cash flow of your company.
- Delivery of a comprehensive business valuation report incorporating traditional valuation theory under the Asset, Income and Market Approaches.
Selling Your Business
Catalyst Connection knows manufacturing and River’s Edge Alliance has experience helping manufacturers in valuation, packaging, and buyer identification. Confidentiality is critical to your existing relationships with employees, customers, and vendors. We not only know and respect that, we center our whole process around it. How can we sell your manufacturing business confidentially? We maintain relationships with leading industry buyers in most manufacturing sectors, including: strategic buyers, private equity firms, family offices, and qualified individuals.
The keys to a successful manufacturing exit are:
- Have a realistic understanding of the value of your business to fairly evaluate offers
- Have relationships with capable manufacturing buyers
- Be able to approach the buyers confidentially
- Professionally present the business and highlight the buyers anticipated ROI
- Demostrate quantifiable intrinsic and strategic value
- Answer the buyers questions with verifiable facts
- Build an atmosphere of trust and mutual respect
- Create competition, Solve problems quickly
We recognize this is one of the most important decisions of your life. We don’t take that responsibility lightly. We will find you a capable acquirer, maximize your return, and smoothly transition ownership – all while maintaining strict confidentiality and the integrity of your current manufacturing operation.
Understanding how your business will be valued by future buyers is a guide to all future business decisions. Being busy and creating value are two different things. Learn how to view your company through the eyes of a buyer and make decisions that create more value!