Buyers look to have a return on their investment, in doing so they place a value on the cash flow of a firm. Almost all buyers use some form of Earnings Before Interest Taxes Depreciation and Amortization (EBITDA) as a proxy for the free cash flow of a company.
In addition to cash flow, buyers consider a combination of a target’s strategic value, growth trajectory, and industry dynamics.
Aldredge & Co. unlocks this value by uncovering and presenting the untapped, and overlooked, value of the firms we represent. A firm’s worth is ultimately based on the how clearly a buyer sees these hidden value points. Feel free to contact us if you have any questions about the value of your firm.
We have discussed at length, here, about the timing associated with the sale of your business.
The short answer is probably not. Owners who decide to sell their businesses themselves may make mistakes that seriously affect the value of their operations in the sale of their companies. Often, an owner does not understand the full value he or she may receive as part of the transaction. Buyers understand this and look to take advantage of it during the acquisition process. Buyers who handle selling the company themselves frequently receive values that are a fraction of the true value of their firms.
Sometimes buyers directly contact a potential seller to gauge whether the owner would want to sell his or her business. The representatives of these buyers often receive bonuses for concessions in price and structure. They also receive bonuses for getting sellers to commit to selling their company. Often these buyers push a seller to make an early and quick commitment to sell their companies only to the buyer. Feel free to contact us to discuss your next steps. We have written a series of papers that provide guidance on this very subject.
If you have additional questions, we have developed a series of Whitepapers covering many of the subjects that about which you may have questions. Contact us for more information.