The Top 5 To Check Out
In case you missed them, here are the Top 5 stories for 2021 on Velorum’s website. Before we dive headlong into 2022 (and we’ve got a great line of articles to share!), let’s take a walk down memory lane and review some key stories from the year that just passed.
- The Two Big Value Killers Can you guess what the two big value killers are for business owners? These are the two things that can derail a business owner and keep a business from being transferable. Remember, that a non-transferable business is most likely going to be valued at its liquidation value. If you are a service provider or non-asset intensive producer, that value likely won’t be much. Don’t close your doors before you read this article.
- Mind the Gap. The problem for many owners is that there is a gap between what they need to retire comfortably and what their business is worth right now. The next question is, what are you going to do about it? Read this article to understand the three gaps that can plague owners and how one might address them so they can transition smoothly from their business.
- Size Does Matter. One of the biggest impacts on the valuation of a business is its size. This article dives into the concept that not only do valuations increase based on size, but so do the multiples, thus providing a multiplicative impact on business value. This suggests that owners may have the incentives to invest in growing their business to the “next level” if it will expand the multiple their business can fetch.
- Timing Matters. If you have a good business, it likely can sell in any market. But, there are better times to sell than others. This article explores the M&A cycle and comments are where we likely are right now and what that means for you as a Middle Market owner.
The State of Owner Readiness. Every year, the Exit Planning Institute conducts at least one survey in a local market to assess the state of owner readiness to exit or transition from their businesses. The NYC report was the first one post-pandemic and the first since 2019. This survey was unique compared to the others since it featured the thoughts of Gen X owners (versus Boomers) and the results were illuminating! Take a look inside and see if this resonates with you.
Coming Up in Q1 2022
Check back regularly as we are going to take a deep dive into private equity and also explore the concept of company specific risk and what that means for the value of your business. Happy reading!
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