The Importance of Business Valuations

Up, Up and Away by Bob Jagendorf

“If business schools could offer just one course, it would not be on stock trading, the efficient market hypothesis or modern portfolio theory. Rather, B-schools should be encouraging students to learn the boring, but critically important, discipline of business valuation.” Warren Buffett I couldn’t go past this quote from Warren Buffet that so neatly points […]

How to Save Money When Buying a Business

In the eye of a horse by Tambako the Jaguar

Buying a business is horse trading. As any good haggler knows, you need to go into the negotiations armed with reasons why the sale price should be lowered. Here are some tips that may help you to pay less to buy a business. Some of these tips are ways to justify your insistence on a […]

What is EBIT?

Old bikes by Todd Baker technowannabe

Earnings Before Interest and Tax or EBIT measures a company’s profitability. EBIT is simply all profits (before interest payments and income taxes are taken into account). Accountants like EBIT and consider it to be an important indicator. It measures profits and avoids distortions that result if companies use different capital structures or tax rates. That makes it […]

Due Diligence Checklist

The Gate by Musa Zero

This due diligence checklist provides a summary of the issues that a due diligence team will consider when conducting a due diligence audit of your business. It is only an overview to the core areas addressed in the corporate due diligence process. Due diligence is an important process that can result in money being saved […]

Why Due Diligence is Important

Money and Magnifying Glass by Images_of_money

Don’t dread the idea of submitting your business records to due diligence. Embrace the process!  It is a great opportunity to make money for comparatively little effort. This potential for increasing your business valuation is often not well understood. It is all tied up in boosting the confidence of the purchaser or investor. Too often […]

How to Value a Business

Summer-Swing-by-David-Hoffman-300

Before we get into how business valuation works, and how you can achieve a higher valuation for your business, there is a simple fact that must engraved in our minds: A business is worth whatever someone is willing to pay for it. Too often we get so caught up in the theory and the process and […]

Steps to Improving EBIT

globe lights by Gaetan lee

There are some practical steps we can take to improve EBIT. They will increase the value of our business and help us get a higher sale price if we sell. In Turn Numbers into Dollars – Increase EBIT, we looked at why an increase in EBIT is so important if you are about to sell […]

How to Turn Numbers into Dollars – Increase EBIT

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Why EBIT is Important EBIT is more than just a number, it is a yardstick often used to value a business. The price someone is willing to pay to buy your business may be calculated as a multiple of your EBIT. A ratio of 2-4 times EBIT is common in many purchases.   If you […]