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Financial Ratios

Posted by David Humphrey on 2 October 2015 | Comments

Most businesses can be compared to other businesses within their industry, even those of a different size, by use of financial ratios.  Some of most common financial ratios for a closely held business include:

comment(s) | Read the full post

The Dealmakers Event

Posted by Jeff Muir on 22 September 2015 | Comments

Beacon Equity Advisors co-hosted The Dealmakers Event: Latest Trends in Mergers & Acquisitions on Monday night at the Boston Marriott Newton Hotel along with Gray, Gray & Gray, TD Bank & Nixon Peabody.

comment(s) | Read the full post

Elements M&A Conference

Posted by Chrissy Mussari on 15 September 2015 | Comments

Tags: , , , ,

To Prepare for a Sale, help Entrepreneurs & Business Owners to sucessfully navigate the muddy, murky world of transitions - and bring them to "What's next for me?"  When they have something to look forward to, they can begin the process of letting go.  

comment(s) | Read the full post

To Patent or Not to Patent

Posted by Jeff Muir on 31 August 2015 | Comments

To many investors the existence of patented products or technology is a key question in their evaluation of an opportunity.  In some cases, a patent can be an important part of the transaction and a significant barrier to entry.  However, the cost of obtaining a patent and the resources needed to defend it against infringement must be considered before deciding whether to seek a patent.

comment(s) | Read the full post

Quality of Financial Statements

Posted by David Humphrey on 17 June 2015 | Comments

As buyers move forward with a purchase of a business they will request copies of financial statements prepared by the seller’s Certified Public Accounting firm.  One of the first items they see on these statements is the name of the firm that prepared these statements, and ask their advisors what they know about the Seller’s CPA firm.  As the size of the target company increases, buyers expect the CPA firm’s reputation will also increase.  Is this a snob test? Partly, but not completely.  There are two things to consider here.  One is firm size and the other is industry knowledge.

comment(s) | Read the full post

Investment Needed

Posted by Jeff Muir on 21 May 2015 | Comments

Business owners are constantly weighing the need to upgrade equipment and technology.  On the one hand, they want to be as efficient and cutting edge as possible, on the other hand constant upgrades may have a negative effect on profitability and can be disruptive to bring online.

comment(s) | Read the full post

Enhancing Value: Monitoring Inventory Turns

Posted by David Humphrey on 30 April 2015 | Comments

A review of Inventory Turns is often an important part of a buyer’s analysis.    Since many businesses have a significant amount of capital tied up in inventory, how fast, or how many times per year a business turns inventory can be as important as the gross margins the business achieves.  If there is a significant difference between a subject company and their industry or businesses of similar size, the owner needs to be able to explain to buyers the reasons for this difference. The owner must demonstrate that their model is efficient, profitable and serves a purpose, thus should continue.

comment(s) | Read the full post

Does Your Business Have Too Many Family Members?

Posted by Jeff Muir on 16 March 2015 | Comments

Perhaps no single topic is more complex than that of family members working within a business.  Everyone has a story about a family business paralyzed by the family dynamics.  While there are some successes, the general feeling among buyers is a fear of businesses with too many family members in key positions, especially: Sales, Customer Service, and Accounting.  Each of these positions deals with the customer and money.  These positions can be difficult to replace at the same time as a working owner.

comment(s) | Read the full post

Product & Industry Concentrations

Posted by David Humphrey on 11 February 2015 | Comments

Too much on one thing can be bad, such as too much revenue from one customer.  This can also be true of too much concentration or reliance on one product or one industry. If a business sells a product and most of their customers are military related and there is a rumor or hint of a sequestration, or a change in military purchasing, buyers will be concerned and reflect this concern in their offer price.  

comment(s) | Read the full post

Do You Own the Intellectual Property?

Posted by Jeff Muir on 13 January 2015 | Comments

Intellectual Property is one of the ways a company can stand out from its competition.  Having legal protection for an idea, a symbol or a marketing phrase can add value to a transaction. Would you buy McDonald’s without the Golden Arches? Would you buy Nike if you could not use the swoosh? What about buying Subway without the right to use the phrase “Eat Fresh”?

comment(s) | Read the full post

Financial Ratios

Posted by David Humphrey on 2 October 2015 | Comments

Most businesses can be compared to other businesses within their industry, even those of a different size, by use of financial ratios.  Some of most common financial ratios for a closely held business include:

comment(s) | Read the full post

The Dealmakers Event

Posted by Jeff Muir on 22 September 2015 | Comments

Beacon Equity Advisors co-hosted The Dealmakers Event: Latest Trends in Mergers & Acquisitions on Monday night at the Boston Marriott Newton Hotel along with Gray, Gray & Gray, TD Bank & Nixon Peabody.

comment(s) | Read the full post

Elements M&A Conference

Posted by Chrissy Mussari on 15 September 2015 | Comments

Tags: , , , ,

To Prepare for a Sale, help Entrepreneurs & Business Owners to sucessfully navigate the muddy, murky world of transitions - and bring them to "What's next for me?"  When they have something to look forward to, they can begin the process of letting go.  

comment(s) | Read the full post

To Patent or Not to Patent

Posted by Jeff Muir on 31 August 2015 | Comments

To many investors the existence of patented products or technology is a key question in their evaluation of an opportunity.  In some cases, a patent can be an important part of the transaction and a significant barrier to entry.  However, the cost of obtaining a patent and the resources needed to defend it against infringement must be considered before deciding whether to seek a patent.

comment(s) | Read the full post

Quality of Financial Statements

Posted by David Humphrey on 17 June 2015 | Comments

As buyers move forward with a purchase of a business they will request copies of financial statements prepared by the seller’s Certified Public Accounting firm.  One of the first items they see on these statements is the name of the firm that prepared these statements, and ask their advisors what they know about the Seller’s CPA firm.  As the size of the target company increases, buyers expect the CPA firm’s reputation will also increase.  Is this a snob test? Partly, but not completely.  There are two things to consider here.  One is firm size and the other is industry knowledge.

comment(s) | Read the full post

Investment Needed

Posted by Jeff Muir on 21 May 2015 | Comments

Business owners are constantly weighing the need to upgrade equipment and technology.  On the one hand, they want to be as efficient and cutting edge as possible, on the other hand constant upgrades may have a negative effect on profitability and can be disruptive to bring online.

comment(s) | Read the full post

Enhancing Value: Monitoring Inventory Turns

Posted by David Humphrey on 30 April 2015 | Comments

A review of Inventory Turns is often an important part of a buyer’s analysis.    Since many businesses have a significant amount of capital tied up in inventory, how fast, or how many times per year a business turns inventory can be as important as the gross margins the business achieves.  If there is a significant difference between a subject company and their industry or businesses of similar size, the owner needs to be able to explain to buyers the reasons for this difference. The owner must demonstrate that their model is efficient, profitable and serves a purpose, thus should continue.

comment(s) | Read the full post

Does Your Business Have Too Many Family Members?

Posted by Jeff Muir on 16 March 2015 | Comments

Perhaps no single topic is more complex than that of family members working within a business.  Everyone has a story about a family business paralyzed by the family dynamics.  While there are some successes, the general feeling among buyers is a fear of businesses with too many family members in key positions, especially: Sales, Customer Service, and Accounting.  Each of these positions deals with the customer and money.  These positions can be difficult to replace at the same time as a working owner.

comment(s) | Read the full post

Product & Industry Concentrations

Posted by David Humphrey on 11 February 2015 | Comments

Too much on one thing can be bad, such as too much revenue from one customer.  This can also be true of too much concentration or reliance on one product or one industry. If a business sells a product and most of their customers are military related and there is a rumor or hint of a sequestration, or a change in military purchasing, buyers will be concerned and reflect this concern in their offer price.  

comment(s) | Read the full post

Do You Own the Intellectual Property?

Posted by Jeff Muir on 13 January 2015 | Comments

Intellectual Property is one of the ways a company can stand out from its competition.  Having legal protection for an idea, a symbol or a marketing phrase can add value to a transaction. Would you buy McDonald’s without the Golden Arches? Would you buy Nike if you could not use the swoosh? What about buying Subway without the right to use the phrase “Eat Fresh”?

comment(s) | Read the full post