Just Elementary, Inc. » Business Valuation
Difference Between Goodwill & Blue Sky in regards to business valuations
The terms Goodwill and Blue Sky are often used interchangeably. A primary reasons for this is that it is assumed that they are the same thing. For practical purposes, in regards to business valuations, there is a distinction between the two terms. Goodwill: Let’s start with Goodwill. A conventional definition of Goodwill would be the amount of money paid for an on-going business beyond its book value. A simple example is a business that has $600,000 in tangible … Read entire article »
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Eminent Domain – Getting the Right Value and Knowing Your Rights
Eminent Domain is a scary sounding proposition. Your property and/or your business can be shut down and taken away from you against your will. The real estate has value, but what about the business located at the real property? How about the value of the business? What are your options? How can you make sure you get a Fair Market Price for the business? Courtesy of the Partners at Nossman, LLP, a California Eminent Domain … Read entire article »
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Business Valuation Multiples & Multipliers, Why Your Business is not just Two Times the Profit
There are a lot of commonly used profit multipliers to determine the value of a business. You may have heard of ‘2 times the profit’, or any other version of it such as three times the profit as an ad hoc Business Valuation. The crux of the matter is: Which multiplier applies to your business and how does it fit in to a Business Valuation? The rest of the post is below the video. The short answer … Read entire article »
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What is Your Business Worth? Different Factors Affecting Business Valuations
There are a lot of commonly used profit multipliers to determine the value of a business. You may have heard of 2 times the profit, or three times the profit, but do they apply to your business? The short answer is no, a Business Valuation is affected by non discrete factors, including the following. The reason for this is that there are too many variables in the phrase ‘2 times multiplier of the profit.’ Effect of Industry Type … Read entire article »
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Navigating Write Offs and Addbacks in the Process of Buying and Selling a Business
What impact on the bottom line profit and overall value of the business do write off have? One of the commonly cited perks of owning a business is the ability to write off expenses and reduce the tax bill. Write offs are fairly common for business owners, but they have an adverse affect on the bottom line profit of a business, which affects the overall Business Valuation for the business. How does this happen? Well, if a … Read entire article »
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Financing Capital Expenditures
A big part of the success and value of a business is in the cash flow management. Which is significantly impacted by Capital Expenditure, commonly referred to as CapEx. Many businesses require a Capital Expenditure Investment in Equipment or other machinery (FF&E) that needs refreshing on a regular schedule. So, the question comes down to how to manage these expenses. Financial Reserve Account One option is to set aside a Financial Reserve on a yearly basis. Doing this is … Read entire article »
Filed under: Business Tips, Business Valuation
Increasing the Value of a Business: Exit Strategy Planning for Selling a Business
Want to make your business more valuable? A business owner should always have the long term in mind when operating a business. This means doing things to make the business more valuable upon transfer, whether it be by sale to an arms length third party buyer, or in some other fashion. Additional Text is below the embedded Video Here are some basic things to consider in regards to Increase the Value Of a Business Customers: • Minimize Customer Concentration: … Read entire article »
Filed under: Business Tips, Business Valuation, Selling A Business
What is a Business Broker & How Do They Help Me Sell My Business?
What is a Commercial Business Broker? A Business Broker helps a Business Owner Sell his or her business to a Buyer. Similar to Residential Real Estate Agent, except the client/product is a business, not a house. Here are common questions we get: Question: Does a Business Broker Buy the Business from a Business Owner? Answer: No! A Business Broker packages a business for sale and markets the business to attract qualified buyers. What does a Business Broker Do for Business Owners? Prepare the … Read entire article »
Filed under: Business Tips, Business Valuation, Commercial Leasing, Due Diligence, Featured, Negotiation, Selling A Business
Why James of Vino Di Copa was Right (Not Wrong) to Turn down the offers from the Shark Tank
There was a lot of negative commentary against James Martin of Copa Di Vino on twitter and even on the Copa Di Vino facebook page. The main sentiment among the negative commentary was that James Martin of Copa Di Vino “blew” his second chance in his repeat appearance on the set of Shark Tank. But, do the numbers agree that he blew his chance? First we’ll break down the numbers, and then describe how it played out. So let’s break this down in order of presentation on the … Read entire article »
Filed under: Business Tips, Business Valuation
Business Valuation includes Debt On Shark Tank
Making a return appearance on the Set of Shark Tank was James Martin of Copa Di Vino. He appeared on the Show in the previous season and turned down an offer from Kevin O’Leary which was for $600,000 in exchange for 51% equity. The reason James Martin turned the offer down the first time was that he was interested in growing Copa Di Vino Brand, whereas Kevin O’Leary was only interested in licensing the Single … Read entire article »
Filed under: Business Tips, Business Valuation
Each Percentage Counts for More than it sounds like – Shark Tank Business Valuation Lessons
Third up on the Shark Tank was Gary DeJohn of Vinamor Wine Aerator. Gary DeJohn was asking for $75,000 in exchange for 30% equity ($250,000 Valuation). At the time of taping Gary DeJohn had sold approximately 1,000 unit. The Vinamor Wine Aerator is a great wine aerating product that can be conveniently used in restaurants to quickly aerate a newly opened bottle of wine, which increases the customers’ enjoyment of the wine. This is a win-win … Read entire article »
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Why Business Valuations are not as simple as One Formula Fits all
Dallas Robinson and Mike Buonomo of Kisstix were the first pair up on Shark Tank. They were on the show to pitch their product which is a mix and match lip balm that creates a fun tingly flavor experience for kissing couples. Dallas Robinson and Mike Buonomo were asking for a $1,000,000 valuation for Kisstix by offering 20% equity for $200,000. Given that Gross Revenues were about $80,000 Kevin O’Leary asked how Dallas Robinson and Mike Buonomo came up with their … Read entire article »
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Negotiation Clinic by Lori Greiner on ABC’s Shark Tank
The final segment of Shark Tank had one of the the most interesting negotiation session in Shark Tank History. It had Lori Greiner at her Negotiating Best. Rick Hopper of ReadeREST, which you can find on Amazon. ReadeREST is strong stainless steel clip that sticks to a shirt because a backing strip featuring neodynium magnets. Hopper was asking for $1,000,000 Valuation ($150,000 for 15% equity) The ReadeREST product demonstrated really well, as Hopper intentionally fell … Read entire article »
Filed under: Business Tips, Business Valuation, Negotiation
Shark Tank Tricky Business Valuations & Profit Margins
First up on ABC’s Shark Tank is Last Lid (@LastLid). The proprietors of Last Lid are Melissa and Kevin Kiernan of Waldwick New Jersey. Their product is a fabric lid that covers outdoor garbage cans, and prevents them from being tampered with by animals. The Kiernans have a problem where their garbage cans are frequently tipped over by raccoons and other foraging animals. After finding no suitable replacement at local hardware stores, the Kiernan’s developed their product. … Read entire article »
Filed under: Business Tips, Business Valuation, Negotiation
Leverage is Key to Winning Negotiations Shark Tank
Having the leverage in a business negotiation is fleeting, and needs to be leveraged before it is lost. That was a key lesson in this episode. First up in the show was Ivory Tennelle from Irvine, California. Ivory Tennelle is the creator of the the Swilt. The Swilt is a combination Hoodie Sweatshirt with a fold up blanket portion. When the blanket is folded up, it looks like a baggy sweatshirt. With the blanket unfolded, Mark … Read entire article »
Filed under: Business Tips, Business Valuation, Negotiation
Leveraging Multiple Offers in Negotiation & Valuation Lessons on ABC’s Shark Tank
First up in the Shark and a great example of negotiation leverage spawned from Multiple Offers is Travis Perry. Perry is the owner of ChordBuddy, an innovative training product that is like training wheels for learning the Guitar. You can buy ChordBuddy on Amazon. As Travis Perry points out, playing the guitar has a real high ‘cool’ factor, to which Robert Herjavec identifies with, and is commensurately excited. The Sharks ask Travis Perry about the sales figures for … Read entire article »
Filed under: Business Valuation, Negotiation
Maintaining Negotiation Leverage – Primary Business Lesson from Shark Tank
Back for a new season of wheeling and dealing, we’ll review the business models, proposed transaction, negotiations and other business lessons on display on ABC’s Shark Tank just as we did for the previous season’s episodes. The first business that was presented on the episode is a product that you can find on Amazon: Clean Bottle (twitter @CleanBottle), founded by Dave Mayer. The product is a sports bottle that has opening on both the top and bottom, which … Read entire article »
Filed under: Business Valuation, Negotiation
Tips for Business Buyers & The Role of the Business Broker
The following video will highlight some introductory tips and suggestions for buyers who are looking to buy a business. The process of finding a good business to buy can be a hard and frustrating one. Our simple tip to minimize frustration and maximize results is to narrow and focus your search to businesses that you are qualified to run based on your skill set and background. This also has the benefit that you have a higher … Read entire article »
Filed under: Business Valuation, Due Diligence
Business Lessons from Shark Tank Season Finale
First up in the season finale of Shark Tank is the prominently featured Rebecca Rescate of CitiKitty. Rebecca Rescate’s CitiKitty is a product that is an alternative to the traditional cat litter solution. This product helps trains cats to use actual Human toilets. As funny as it looks watching a cat on a toilet, it does solve a problem, especially for urban dwellers whose cats can not easily go outdoors and use a yard for their bathroom needs. Rebecca … Read entire article »
Filed under: Business Tips, Business Valuation, Negotiation
Negotiation and Valuation Lessons from ABC’s Shark Tank
Episode 207 of ABC’s Shark Tank elicited many responses, and as usual contained a great many business lessons on display, in particular regarding Valuation and Negotiation. First up in the Shark Tank were Jason Lucash & Michael Szymczak of OrigAudio. They asked for $150,000 for 15% equity. Their company sells portable audio speaker solutions. On the show they claimed to have a track record of sales. In their one year of sales they have grossed $750,000, upon … Read entire article »
Filed under: Business Tips, Business Valuation, Negotiation
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