Business Blog for Buying and Selling a Business | EastWind

Providing Freedom by Selling Businesses
for Maximum Market Value!

Tim Fawcett
BCA, CEPA, CEMA, CBC

Do you dream of owning
your own business?

Business Blog:

View all Blog Business Valuation Buyer Articles Buyer FAQ Buying a Business Seller Articles Seller FAQ Valuation

Complex Issues Addressed When Valuing a Business

Valuing a business is a complex undertaking. In part, this complexity lies in business valuation being a subjective process: the person conducting the valuation determines the company’s value. Adding another layer of complexity is the fact that the business valuator has no choice but to assume all the information provided is correct and accurate.

Beyond these two issues, a host of complex variables are considered in the process of valuing a business. In this article, we will identify six issues that must be assessed.

April 17, 2018Blog, Business Valuation

Can Similar Companies Have Huge Value Differences?

Can two companies in the same industry have drastically different valuations? In short, the answer is a resounding, “yes.” To discover how this is possible, let’s consider the example of two companies that both have an EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) of $6 million, but with two very different values. Business One is valued at five times EBITDA, which prices it at $30 million, whereas Business Two is valued at seven times EBITDA, meaning it has a value of $42 million. What things factor into this huge difference?

April 10, 2018Blog, Business Valuation

There’s No Business Like a Family Business

Family businesses are different, for many reasons. Sometimes there are advantages to working with relatives; other times, drawbacks. One specific disadvantage of the family business is that familiarity can lead owners to be more relaxed and important issues relating to the future can be overlooked.

April 3, 2018Blog, Seller Articles

What Do Buyers Want in a Company?

Selling your business doesn’t have to feel like online dating, but for many sellers the experience is fraught with the same kind of uncertainty and confusion. They find themselves wondering, “What exactly do buyers want to see before buying my company?” Working with a merger and acquisition advisor is an excellent way to take some of the mystery out of this often-elusive equation. In general, there are three areas sellers should focus on to make their businesses more attractive to buyers.

March 27, 2018Blog, Seller Articles

3 Common Seller Errors Caused by Inexperience

The old saying, “There is no replacement for experience,” is a truism that has stood the test of time. When it comes to businesses, and selling them, inexperience can dismantle a deal.

March 21, 2018Blog, Seller Articles

Why Embrace Corporate Social Responsibility?

If you are unfamiliar with corporate social responsibility, you are certainly not alone, but you will be hearing a lot about it in the coming years. According to Global Affairs Canada, “Corporate Social Responsibility (CSR) is defined as the voluntary activities undertaken by a company to operate in an economic, social and environmentally sustainable manner.”

In this article, we’ll look at how CSR can positively impact your company and its operation when it is implemented with sincerity.

March 13, 2018Blog, Seller Articles

Why Does An Owner Become A Seller?

When a business owner has worked hard to establish or grow a business—often from the ground up—why would he or she choose to sell? After investing innumerable hours, energy, ingenuity, and effort to make one’s business known and successful, it appears selling might be the last thing an owner would be tempted to do. But businesses sell all the time and for many valid reasons.

March 6, 2018Blog, Seller Articles

Is Confidentiality Crucial?

The adage “loose lips sink ships” doesn’t have ancient origins. While it sounds like one of those sayings that’s been around forever, it was created during World War II, and was taken quite literally. The truth behind the phrase was that a lack of secrecy or confidentiality could lead to the losses of war ships or other wartime deaths. So, the saying was serious. Today, the “loose lips” adage is used often in the business world.

February 27, 2018Blog, Seller Articles

4 Factors Affecting Ownership Transition

If you own a business, ownership transition should be a key part of your planning. A few years ago, MassMutual Life Insurance Company conducted a thought-provoking survey of family-owned businesses. Obviously, family-owned businesses have their own unique needs and challenges. The MassMutual Life Insurance Company survey underscored this fact, providing valuable information that is still relevant today. Let’s take a closer look at some of the key conclusions and discoveries.

February 20, 2018 1 CommentBlog, Seller Articles

Are You Ready to Exit?

If the prospect of selling your business has motivated you to read this article, your curiosity indicates you are taking the first step toward a business exit. You don’t have to make a commitment at this point; you are just informing yourself about what is necessary to make a successful exit. This article should answer some of your questions and help you through the maze of the selling process itself.

November 27, 2017Blog, Seller Articles, Seller FAQ

What Determines the Value of Your Business?

The initial response to the question in the title really should be: “Why do you want to know the value of your business?” This response is not intended to be flippant, but is a question that really needs to be answered.

Does an owner need to know for estate purposes?
Does the bank want to know for lending purposes?
Is the owner entertaining bringing in a partner or partners?
Is the owner thinking of selling?
Is a divorce or partnership dispute occurring?
Is a valuation needed for a buy-sell agreement?

There are many other reasons why knowing the value of the business may be important.

October 17, 2017Blog, Business Valuation

Selling Points for Business Owners

“Independent business owner” is a phrase with two meanings. Of course, it means being the owner of an independent business. But another way to look at “independent business owner” is to let this phrase define the very personality of the person at the helm. Independent. Confident. Self-assured. Strong-willed. These are vital entrepreneurial attributes but, ironically, they can sometimes work against the business owner when it comes time to sell. This post introduces five important selling points that can help business owners achieve a successful sale of their business.

October 3, 2017Blog, Seller Articles

Understanding Issues Buyers May Face

Not every prospective buyer actually buys a business. In fact, out of 15 prospective buyers, only one actually makes a purchase. Sellers should remember that being a buyer can be stressful. Buying a business is usually one of the single largest financial decisions a person can make. In this article, we are going to explore a few of the reasons why being a buyer can be both stressful and taxing. Understanding a buyer’s perspective will help you on the road to successfully selling your business.

August 23, 2017Blog, Seller Articles

6 Most Common Types of Buyers: Pros & Cons

Business owners who are considering selling a business should realize there are many different types of prospective buyers. Today’s prospective business buyers are more sophisticated and diverse than ever before. Let’s take a closer look at the different types of prospective buyers and what you should know about each of them.

August 9, 2017Blog, Seller Articles

Do You Really Know Your Company’s Value?

It is common for company executives to undergo annual physical check-ups. They are also likely to examine their own investments at least once a year, if not more often. However, rather perplexingly, these same capable and responsible executives often fail to consider giving their company an annual “check-up,” unless required to do so by rule…

July 4, 2017Business Valuation, Seller Articles