Take Five #094: Two most common SMB valuation methods explained, and more
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Codely v2.0 public release is here
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What has changed in our latest release?
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All new features available for all public channel users
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Coding collaboration with over 200 users at once
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Real-time code save every 0.1 seconds
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Take Five #094: Two most common SMB valuation methods explained, and more
1. Harvard Business School professors discuss all things SMB acquisition in Q&A-style interview
Royce Yudkoff & Rick Ruback are both professors at the Harvard Business School, and co-teach two wildly popular courses called The Financial Management of Smaller Firms and Entrepreneurship through Acquisition, both of which focus on how to acquire, finance and operate your own smaller firm. In 2017 they also co-published the widely read book, The HBR Guide to Buying a Small Business, published by Harvard Business Review Press, which acts as the definitive source of wisdom and guidance for a countless number of acquisition entrepreneurs across the world.
Listen to the In the Trenches episode here.
2. Tax Post: Using “F” Reorganization to acquire an S Corp
3. Non-plumber buys 35-person business, misses seller’s team meet-and-greet, recovers
4. “Silver Tsunami” Stats: ~30% plan to sell within 5 years, but 70% have no real succession plan
Here’s the deal: Most business owners DO NOT have a succession plan in place.
That much is clear.
Recent survey data on hundreds of American small businesses from Live Oak Bank found 70% have no real succession plan, yet nearly 1/3 plan to transition ownership within 5 years.
Additionally, Live Oak found that 26% have accelerated transition plans due to the state of the economy.
Many aging business owners will soon be looking for an out. What do these people care about when they sell? According to the research:
-43% care about the preservation of company legacy/integrity
-24% care about the price they can sell at
-22% care about the next owner’s treatment of their customers and employees
It’s no longer as simple as handing off a farm to your kids for them to manage.
(Not that that’s ever been particularly simple…)
So say a buyer commits to those items above, that could be all an owner needs to hear…
Find Contrarian Thinking’s detailed post with graphs and data here.
5. Two most common SMB valuation methods explained
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