A Lesson on Business Valuations: What Owners Need to Know
We interviewed Kyla Hansen, partner at JAK CPA's today, who's also one of our esteemed show sponsors!
Kyla gave us a lesson on different types of Valuation, when they apply and what owners need to know about how their current business Valuation can affect their future outcome.
Methods of Valuation apply in certain situations, like when an owner plans to give a large gift, a full blown Valuation is important to utilize. Conversely, when an owner just needs to know where they're at today as far as Value goes, a Calculation of Value is appropriate.
What about intangible value in a business? Things like customer list, key personnel and brand? Kyla said that the company's cash flow will weigh heavily on how much value is attributed to these forms of capital. In addition to paying close attention to the intangible value of a business, she encouraged owners to have their financials normalized, meaning adjusted to reflect true numbers. When an owner's compensation is out of line with the market, when personal expenses are paid by the business, or the company has been a party to a lawsuit (among other situations) those are instances that would require an adjustment to the financial reports and 'normalization' of certain line items to reflect a true picture.
Kyla recently published an article that we'd highly recommend you read in addition to listening to the show here
Connect with Kyla Hansen here and Julie Keyes here
Exciting events coming up!
- True North M&A Summit Register here
- KeyeStrategies Quarterly Online Learning event Register here
- Twin Cities Metro Area Chapter Owner's Forum on Oct 5 Register here
Thank you to our show sponsors! Dayta, JAK, Sunbelt Business Advisors and Trust Point
There is still time to participate! Click on the link for the EPI 2023 Minnesota State of Owner Readiness Survey
Are you ready for your best exit? There is no time like the present to prepare.
Check out these resources offered by KeyeStrategies:
- Business Readiness Transition online course
- Free Ebook download here
- Purchase Poised for Exit book here
