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Capital Ideas for Middle Market Businesses

Welcome to this issue of Capital Ideas, our newsletter dedicated to business selling, business buying and financial resources for mid-market companies.


Maximizing Business Value Before Exiting

The Difference Between Being Ready to Sell and Being Prepared to Sell

By Peter G. Moore, Managing Director
Portland, Maine Office
Corporate Finance Associates

Balue DriversOften when we meet a business owner for the first time and he proclaims he is ready to sell his business we soon find after a few key questions that the owner is not properly prepared to sell his company. When it comes to the sale of your business readiness is usually an emotional state of mind. “I'm ready to let go, I'm tired of this business and ready to move on”, are some of the refrains from business owners who've decided they wish to sell their company and retire like so many of their friends have done.

The Preparedness Factor® however is an elevated state of readiness achieved by careful planning, consultation with key advisors (attorney, accountant, financial planner, insurance advisor, banker and investment banker) and the creation of a road map on how to achieve your plans for life after business.

One of the most important areas of consideration in the process of reaching the Preparedness Factor® is examining the key attributes that contribute to value in your business. These Value Drivers are the evidence buyers are looking for, and which must exist in order for you to obtain a premium price for your business. Without these your company will appear ordinary, average and lacking a compelling reason for someone to pay top dollar for your company....Read more »


Business Valuation: An Objective Look

Several Ways to Approach Value

By S. Lee Crawley , Managing Director
Tulsa Office, Corporate Finance Associates

Business ValuationWhat do you think my company is worth? This is a question asked frequently by prospective clients who are considering the sale of their companies. Although there are many other factors that can affect a business owner's decision to pursue a sale, valuation is an essential matter for Business Owner's to understand.

While there are several ways to approach "value", to be discussed in this article, it is critical to establish the purpose for the valuation. Our purpose is the sale of the business to a willing, knowledgeable buyer. This is basically the definition of Fair Market Value.

The leading business valuation associations, the American Society of Appraiser (ASA), the Institute of Business appraiser (IBA), and the National Association of Certified Valuation Analysts (NACVA), all agree on three major approaches to business valuation; the Cost Approach, the Market Approach, and the Income Approach... Read more »


Feature Acquisition

tombstone

Situation: Code Red, a leader in CPR, provides first aid and automated external defibrillator (AED) training to companies nationwide. Code Red was founded in 2005 by Brian Leonard with the mission of protecting the workplace from sudden cardiac arrest and workplace related injuries. As a national training center for the American Heart Association, Code Red is able to provide clients with CPR, First Aid and AED training classes anywhere in the United States. Code Red also distributes AEDs for some of the largest AED manufacturers – serving clients nationwide.

Solution:Rob Umlauf, Vice President in our Chicago office, had a long relationship with Code Red… almost since the company's inception. When Mr. Leonard was ready to take the company to the next level, we immediately knew that this was a perfect fit for our client, Saturday Capital,” stated Joe Contaldo, Managing Director of Corporate Finance Associates.


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