The purpose of Kismet Business Brokers is to connect up sellers and buyers for their mutual benefit
With 30 years experience in the field of real estate and finance and a vast array of other fields, Kismet is uniquely qualified to render assistance. The founder and Broker of Kismet Business Brokers, Willard Michlin, is well known for his ability to keep both sellers and buyers talking with each other until a mutually beneficial agreement can be reached.
He is also genuinely interested in helping people.
BUSINESS BUYING: DO RIGHT BY THE PROCESS
Business buying is on your mind. You want to bring the rewards of owning a business into reality. Perhaps you want a particular kind of business. Perhaps you want an investment, or to run the company yourself. There are a lot of choices. Apparently good investments can be bad choices for you. So much depends on the accuracy of the financials. A potential business could have problem areas that aren’t immediately evident without a full due diligence rundown.
Sometimes there are pitfalls that experience would have predicted, but aren’t immediately evident. That’s why you need expert help. That’s where our array of business buying services come in.
There are endless possibilities. If you want to be certain that the choices you make will bring you the greatest reward as a potential business owner, your wisest first choice is to get true experts on your side. At Kismet our motivation is your complete satisfaction in the process of buying your business, and we have decades of successful experience behind us.
BUSINESS SELLING: THE POWER OF EXPERTISE
How Is The Value Of A Business Worked Out?
There are many different ways to work out the value of a business. For the small to mid-size business, there are 3 main approaches that are used more than others. These are the Income value, Market value and the Asset value.
In brief, these would be described as follows:
Valuation based on income: Here one is looking at the potential earning power of the business into the future. Past earnings, expected future growth, owner compensation adjustments, and specific risk factors, such as customer concentration, weak management and lack of diversification are all taken into account when income based valuations are used.
Market Valuation: This method of valuing a business is similar to the way one values a house when selling it. What is being looked at here is what the market will pay for the business in question. Basically, one collects information on the sale of comparable businesses within the industry that the business is in.
In both Income valuations and Market valuations, we will find a price multiple. This is usually price divided by gross sales and price divided by earnings. The applicable price multiple is selected primarily on the profitability of the business. For example, a business with high profits would have a higher price multiple applied to it. A business with low profits would be assigned a lower price multiple. When using this approach, one gets a more accurate result when one uses a minimum of about a dozen comparables.
Asset valuation: This valuation procedure assumes that a business is worth the fair market value of its tangible (physical) assets plus its intangible assets. Then from these total assets, liabilities or debts are deducted. To value a business that has intangibles, several methods are used. The method that is most employed in this area is the 5-step excess earning calculation. That calculation deals with tangible assets, intangible assets, liabilities and adjustments thereof, to arrive at an estimated value for the business. It figures out what the reasonable return is on the assets of the business should be. If the profit is greater, then the business has some intangible assets that are making the excess profit.
When selling, you want to be certain that the choices you make will bring you the best benefit possible from your sale, your wisest first choice is to get true experts on your side. At Kismet our motivation is your complete satisfaction in the process of selling your business, and we have decades of successful sales experience behind us.
Your business dealings are at a critical juncture right now. You need the right kind of expertise on your side. Save yourself headaches later, for a free phone consultation, call us at 805-428-2063.
