Of all 8 key drivers of business value, the financial performance of a business is often assumed by business owners to be the most important driver of business value. Arguably this is true as (in some circumstances) business value can be calculated by multiplying the maintainable earnings of the business by the capitalisation rate. Clearly under this approach the greater the amount of earnings or profits the higher the business value. Typically this is how most business owner

As a Gold Coast based business valuation specialist firm, BSP Strategic is exposed to a host of businesses servicing a wide variety of industries. Manufacturing, Construction, Retail Trade, Food and Tourism are traditionally at the top of the list with these four industries comprising approximately 70% of all local business valuations. Professional service firms including, health and financial services are also prevalent. Valuation of each of these business types couldn’t be

When valuing a business selection of the correct multiplier is critical to achieving an accurate well founded and justifiable valuation. Some of the more commonly used acronyms for valuation multipliers include; Sellers Discretionary Earnings (SDE); Net Sales; Gross Profit Margins; EBIT; and EBITDA; All multipliers are useful in different situations although it is beyond the scope of this article to detail there best uses. Often when selecting a multiple it is useful to evalu

The Sellability Tracker is a quarterly study designed to track worldwide trends in the liquidity of privately held businesses, business valuation trends, average offers by industry, etc. This study was conducted by the team at The Value Builder System™— a cloud-based software application that allows business owners to evaluate the “sellability” of their company. The study includes analyzed data from over 23,000 users of The Value Builder Score from around the world between Ju

If you are in business then there’s a good chance that at some point you have probably wondered, what is my business worth? You have probably also have some figure in mind of what you think it is worth, right? So how did you arrive at this figure? If you are like most, you are likely basing your valuation on some form of industry average multiplier, rule of thumb or crude comparison of a similar business sale that you know about? You might have heard things like in my industr