Valuation Considerations for Orthodontics Practices

When valuing an Orthodontics Practice, two important considerations need to be made: Accounts Receivable. Accrual versus Cash Basis Accounting. When valuing an Orthodontics practice, especially if it is a startup and less than 2 years old it is important to consider Accounts Receivable in the valuation equation.  For instance, when valuing an orthodontics practice, they [...]

By |2018-01-23T16:31:45-07:00January 23rd, 2018|Business Valuation Expert Tips and Information|Comments Off on Valuation Considerations for Orthodontics Practices

Beware: A Self-input Business Valuation is not a good idea

There is a type of business valuation software and service available that allows a business owner to input their own financial information.  Although this may seem like a good idea, it is a very bad practice.  Valuations, like tax returns are complicated and require a seasoned professional to analyze and input the data to get [...]

By |2018-01-17T22:50:55-07:00January 17th, 2018|Business Valuation Expert Tips and Information|Comments Off on Beware: A Self-input Business Valuation is not a good idea

Adjusted EBITDA or EBITDA? – Part 3 of 3

Now that you can calculate EBITDA correctly it is time to drill down into the difference between Adjusted EBITDA and EBITDA.  Before we review this important distinction, I think it is important to explain the reason for using another benchmark for valuation. If you classify businesses as small, medium or large, breaking them up into [...]

By |2017-12-18T23:06:07-07:00December 18th, 2017|Business Valuation Expert Tips and Information|Comments Off on Adjusted EBITDA or EBITDA? – Part 3 of 3

Adjusted EBITDA or EBITDA? – Part 2 of 3

Now that we have a good baseline Earnings number we need to look at Interest, Taxes, Depreciation, and Amortization. Interest Expense. The interest you can add back is all interest from debts and credit cards and consumer debts. It also can include finance charges. What interest does not include is bank fees, charges, or merchant [...]

By |2017-12-15T15:34:44-07:00December 15th, 2017|Business Valuation Expert Tips and Information|Comments Off on Adjusted EBITDA or EBITDA? – Part 2 of 3

Adjusted EBITDA or EBITDA? Part 1 of 3

There is a lot of discussion in the M&A world about EBITDA and a wide variety of opinions about what is included and what is not included.  Because of this, many advisors, sellers, and buyers are using an “adjusted” EBITDA figure for sales transactions.  How do EBITDA and “adjusted” EBITDA differ?  This is part 1 [...]

By |2017-12-14T11:50:44-07:00December 14th, 2017|Business Valuation Expert Tips and Information|Comments Off on Adjusted EBITDA or EBITDA? Part 1 of 3

What is Fair Market Value anyhow?

When determining the value of a business there are many terms which can be confusing.  The term most often used if Fair Market Value and is defined as: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller [...]

By |2018-03-14T16:35:50-06:00December 1st, 2017|Business Valuation Expert Tips and Information|Comments Off on What is Fair Market Value anyhow?

What is missing from EBITDA?

Working Capital When a business is sold, Working Capital (Cash, Accounts Receivable Inventory, and Accounts Payable) are usually included in the sale for businesses with a value over $1 million and not included for businesses worth less than $1 Million.   When it is included, a “normal” amount of Working Capital is included, but the term [...]

By |2017-11-30T19:28:01-07:00November 30th, 2017|Business Valuation Expert Tips and Information|Comments Off on What is missing from EBITDA?

Who Drives Your Business Impacts the Value of Your Business

A common sentiment among the business owners I meet is “my business drives me”. What I mean by that is who or what is really in charge of your business? Are you in charge of your business or does your business drive you? This is particularly true for a business owner who started the [...]

By |2017-10-24T14:47:42-06:00October 24th, 2017|Business Valuation Expert Tips and Information|Comments Off on Who Drives Your Business Impacts the Value of Your Business

Top Value Drivers For Your Business for Business Valuation

What are some top value drivers for a business?  Here is a list to consider that will help increase the value of your business. Financial Performance When a financial buyer is contemplating a purchase, the number one metric they use to measure value is financial performance.  It is important that the financial information being presented [...]

By |2017-10-11T17:05:06-06:00October 11th, 2017|Business Valuation Expert Tips and Information|Comments Off on Top Value Drivers For Your Business for Business Valuation

How Having Multiple Owners Affects Business Value

One important thing for Buyers looking to value a business is for them to recalculate EBITDA and SDE if there are multiple owners of the business. It is easy for a non-seasoned business valuations expert to overlook the true SDE and EBITDA when there are multiple owners of a business. For example, see the Line [...]

By |2017-10-10T15:37:13-06:00October 10th, 2017|Business Valuation Expert Tips and Information|Comments Off on How Having Multiple Owners Affects Business Value