Download - Building Company Value_060415 _R1
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Building Your Company’s Value
Scott Wait, CPA, AEPRich Wait, CPA, CVA, AEP
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Welcome
Essence of Business Value
Top Business Value Drivers
Top Business Risks to Value
Identify Your Business Life Cycle
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Have you heard the Expression…
TUIT
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The Essence of Value
Multiples… Are a Shorthand Convention:
X represents earnings:
i.e. 3X;4X; 5X;
6X, etc…
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Drivers of Value
• Brand (Do you have a brand or a private label?) • Channel metrics • Innovation (Are you an innovator? Apple)• Product “tweaking”• Customer loyalty • Your business sector’s growth rate
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Drivers of Value
QUALITY OFMANAGEMENTTEAM
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Drivers of Value
QUALITY OFEARNINGS
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Drivers of Value
EXISTING CLIENT CONTRACTS & RELATIONS
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Drivers of Value
STRENGTH OF EXISTING SUPPLIER RELATIONSHIPS
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Top Business Risks to Value
Common elements of Business Risk
• Inexperienced Management Team• Lack of Management Depth• High employee turnover (Key employees not locked
into a contract – retention by bonus)• Contingent Liabilities• Lack of Customer Diversification• Poorly Maintained Assets• High Operating Costs• Frequent Contract Renewals (bidding)• High Financing Cost• Employee Fraud• Cyber Fraud
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Know Your Business / Industry Lifecycle
Business UnitLife Cycle Matrix
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Advisors at Critical Points in Business
Financial management and strategic advisors are important resources to achieve your business and personal goals.
Successful companies are transparent with their
relationships and rely on professional advisors and consultants to support them, especially at critical points.
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Scott Wait, CPA, AEP Rich Wait, CPA,CVA, AEP [email protected] [email protected] 775.825.7337
Contact Information