Details
Business Valuation For Dummies
1. Aufl.
16,99 € |
|
Verlag: | Wiley |
Format: | EPUB |
Veröffentl.: | 22.04.2009 |
ISBN/EAN: | 9780470523384 |
Sprache: | englisch |
Anzahl Seiten: | 368 |
DRM-geschütztes eBook, Sie benötigen z.B. Adobe Digital Editions und eine Adobe ID zum Lesen.
Beschreibungen
<p><b>Buying or selling a business? Acquire the tools and learn the methods for accurate business valuation</b></p> <p>Business valuation is the process of determining the value of a business enterprise or ownership interest. <i>Business Valuation For Dummies</i> covers valuation methods, including advice on analyzing historical performance, evaluating assets and income value, understanding a company's financial statements, forecasting performance; estimating the cost of capital; and cash flow methods of valuation.</p> <p>Written in plain English, this no-nonsense guide is filled with expert guidance that business owners, managers at all levels, investors, and students can use when determining the value of a business. It contains a solid framework for valuation, including advice on analyzing historical performance, evaluating assets and income value, understanding a company's financial statements, estimating the cost of capital, business valuation models, and how to apply those models to different types of businesses.</p> <p><i>Business Valuation For Dummies</i> takes you step-by-step through the business valuation process, explaining the major methods in an easy-to-understand manner with real-world examples. Inside you'll discover:</p> <ul> <li>The value of business valuation, including when it's necessary</li> <li>The fundamental methods and approaches to business valuation</li> <li>How to read a valuation report and financial statements</li> <li>The other players in the valuation process</li> <li>How to decide you're ready to sell -- and the best time to do so</li> <li>The three stages of due diligence: the meet and greet; the hunting and gathering; the once-over</li> <li>How to decide you're ready to buy -- and find the right business for you</li> <li>What due diligence means on the buying side of things</li> <li>When to call in the experts: divorce; estate planning and gifting; attracting investors and lenders</li> </ul> <p>This is an essential guide for anyone buying a business, selling a business, participating in a merger or acquisition, or evaluating for tax, loan, or credit purposes. Get your copy of <i>Business Valuation For Dummies</i> to get the information you need to successfully and accurately place a value on any business.</p>
<p>Introduction 1</p> <p>About This Book 1</p> <p>Conventions Used in This Book 2</p> <p>What You’re Not to Read 3</p> <p>Foolish Assumptions 3</p> <p>How This Book Is Organized 4</p> <p>Part I: What Business Valuation Means 4</p> <p>Part II: Getting Familiar with Valuation Tools, Principles, and Resources 4</p> <p>Part III: If You’re Selling a Business 4</p> <p>Part IV: If You’re Buying a Business 5</p> <p>Part V: Don’t Try This at Home! Turning Things Over to the Valuation Experts 5</p> <p>Part VI: The Part of Tens 5</p> <p>Icons Used in This Book 6</p> <p>Where to Go from Here 6</p> <p><b>Part I: What Business Valuation Means 7</b></p> <p><b>Chapter 1: The Value of Understanding Business Valuation 9</b></p> <p>Basic Tenets and the Importance of Valuation for Businesspeople 10</p> <p>Value differs from price 10</p> <p>Planning drives value 10</p> <p>No two valuations are exactly alike 11</p> <p>Valuation isn’t a one-time deal 12</p> <p>The Basic Building Blocks for Calculating Value 12</p> <p>Discount and capitalization rates: The numbers that really matter 13</p> <p>Doing your homework: Due diligence 13</p> <p>How rule of thumb enters into business valuation 14</p> <p>Getting Expert Help 15</p> <p>The Move toward Intangible Asset Valuation 16</p> <p>Family Businesses: Important Valuation Targets 16</p> <p><b>Chapter 2: What Triggers a Business Valuation? 19</b></p> <p>Exploring Reasons for Wanting a Business 20</p> <p>It’s time for a new career 20</p> <p>You’re fulfilling a dream 21</p> <p>You’re taking advantage of a strategic opportunity 22</p> <p>You’re buying a business to pass on to your heirs 23</p> <p>Shaking the Money Tree: How Lenders Make Thorough Valuation a Necessity 24</p> <p>Borrowing to buy a business: What lenders want to see 25</p> <p>Preparing for mergers and other big-money deals 26</p> <p>Seeking new or continued funding for an existing business 27</p> <p>Attracting public or private investors 27</p> <p>What If You Want — or Need — to Sell a Business? 28</p> <p>Doing some smart estate planning 28</p> <p>Reaching retirement 29</p> <p>Letting the kids take over 29</p> <p>Facing threats from market forces 30</p> <p>Separating from a co-founder or partner 30</p> <p>Dealing with divorce 32</p> <p>Exit Plans: Writing the Ending 32</p> <p>Who benefits from an exit plan? 33</p> <p>When should an exit valuation be done? 33</p> <p><b>Chapter 3: Understanding the Tangibles and Intangibles of Business Valuation 35</b></p> <p>Examining Your Reasons for Valuing This Business 36</p> <p>Introducing Standards of Value 37</p> <p>The mother of all standards: Fair market value 38</p> <p>Perceptions of investment value 38</p> <p>The fundamentals of intrinsic value 39</p> <p>Going over going-concern value 39</p> <p>Liquidation value 40</p> <p>Adjusting or Normalizing a Financial Statement 41</p> <p>Other Considerations: Science Meets Art 42</p> <p>Adding business and economic news 42</p> <p>Folding in tangible assets 43</p> <p>Drawing valuation conclusions with intangible assets 43</p> <p><b>Chapter 4: Approaches and Methods — Basic Theories of the Valuation Process 45</b></p> <p>A Step-by-Step Overview of the Valuation Process 47</p> <p>Risky Business: Gauging Circumstances for the Best Results 49</p> <p>Understanding the different approaches 50</p> <p>Calculating risk and its relationship to present value 55</p> <p>Using discount and capitalization rates and income valuation methods 56</p> <p><b>Chapter 5: The Challenge of Valuation in a Knowledge Economy 61</b></p> <p>Moving from a Hard-Asset to an Intangible-Asset Economy 61</p> <p>Reviewing types of assets 62</p> <p>Recognizing the increasing value of intellectual property 63</p> <p>Determining the Value of a Company Based on Ideas 64</p> <p>The importance of real, documented income 64</p> <p>What strategic buyers and lenders want to see 66</p> <p>Reaching Intangible Value 67</p> <p>Taking a stab at brand valuation 67</p> <p>Recognizing customers as valuation drivers 69</p> <p>Preserving Your Knowledge Business for the Future 70</p> <p>Shaky times: When the founder’s brain leaves the building 70</p> <p>What owners need to do: Planning ahead 71</p> <p><b>Part II: Getting Familiar with Valuation Tools, Principles, and Resources 73</b></p> <p><b>Chapter 6: Getting Familiar with a Typical Valuation Report 75</b></p> <p>What a Valuation Report Is Supposed to Do 76</p> <p>Outlining a Typical Valuation Report 76</p> <p>Cover 77</p> <p>Valuation summary 77</p> <p>Valuation assignment 80</p> <p>Economic outlook 81</p> <p>Industry outlook 82</p> <p>Business overview 83</p> <p>Conclusion of value 85</p> <p>Appendixes 86</p> <p><b>Chapter 7: Meeting the Supporting Players in the Valuation Process 87</b></p> <p>Getting Help in Valuing Your Business 87</p> <p>Recognizing situations that call for valuation experts 89</p> <p>Finding the experts you need 90</p> <p>Seeking the qualities your experts should have 91</p> <p>Appraising What Appraisers Do 92</p> <p>How appraisers are trained and certified 93</p> <p>What appraisers cost 95</p> <p>How to examine a business appraiser’s work process 96</p> <p>What to ask a prospective business appraiser 97</p> <p>Taking Account of Accountants 98</p> <p>How accountants are trained 99</p> <p>How accountants are certified 100</p> <p>What accountants cost 101</p> <p>How to examine an accountant’s work process 102</p> <p>What to ask a prospective accountant 102</p> <p>Hiring Advocacy: Attorneys 103</p> <p>How attorneys are trained and certified 104</p> <p>What attorneys cost 105</p> <p>How to examine an attorney’s work process 105</p> <p>What to ask a prospective attorney 105</p> <p>Brokers: One-Stop Valuation and Sale Services 106</p> <p>How business brokers are trained and certified 107</p> <p>What business brokers cost 108</p> <p>How to examine a broker’s work process 108</p> <p>What to ask a prospective business broker 108</p> <p><b>Chapter 8: Understanding Financial Statements 111</b></p> <p>Gathering the Financial Data You Need 112</p> <p>Looking into Support Data 112</p> <p>External data 112</p> <p>Internal data 113</p> <p>Taking a Look at Financial Statements 114</p> <p>The balance sheet 114</p> <p>The income statement 118</p> <p>Statement of retained earnings 122</p> <p>Cash-flow statement 123</p> <p>Ratios and formulas for valuation 126</p> <p><b>Chapter 9: Using Rule-of-Thumb Valuations for Mom-and-Pop Businesses 131</b></p> <p>What Rules of Thumb Do in Business Valuation 132</p> <p>2008 Rules of Thumb from the Business Reference Guide 133</p> <p>Full-service restaurants 133</p> <p>Bars 135</p> <p>Gift shops 137</p> <p>Medical practices 138</p> <p>Auto repair shops 140</p> <p>Day-care centers for children 142</p> <p>Dry cleaning 144</p> <p>Coin laundries 146</p> <p>Bookstores 149</p> <p>Bed-and-breakfasts 149</p> <p><b>Part III: If You’re Selling a Business 153</b></p> <p><b>Chapter 10: Making Sure You’re Ready to Sell 155</b></p> <p>Understanding Why Timing Is Important 156</p> <p>Examining the Motivations behind a Potential Business Sale 156</p> <p>Anticipating the owner’s retirement 158</p> <p>The kids are taking over! 158</p> <p>Weighing the possibility of a merger or acquisition from a friendly suitor 159</p> <p>Changing market conditions are threatening a company’s future 159</p> <p>Bringing Valuation into the Picture before You Bring In the Buyers 159</p> <p>Providing a reality check 160</p> <p>Transparency: Preparing for a sale 161</p> <p>Heading off problems to increase value 162</p> <p>Determining the Kind of Transaction You Want 165</p> <p>Outright sale 166</p> <p>Employee stock ownership plan (ESOP) 166</p> <p>Ownership transfer to key family members 166</p> <p><b>Chapter 11: Deciding What to Do about the Family Company 167</b></p> <p>Planning for the Worst Possible Scenario 168</p> <p>Examining the State of the Family Business 169</p> <p>Specific characteristics of family companies 169</p> <p>How families hurt the value of their businesses 170</p> <p>Why “equal” in a family business isn’t always fair 174</p> <p>Getting Your Family Down to Business 175</p> <p>Following a phased-in approach 176</p> <p>Addressing the fairness question head-on 178</p> <p>Setting up the best plan for the generations 178</p> <p><b>Chapter 12: Due Diligence on the Sell Side 181</b></p> <p>Looking at Why a Seller Has to Do Due Diligence 181</p> <p>Understanding the Three Stages of Due Diligence 183</p> <p>Tricks of the Trade: Collecting and Exchanging Information 184</p> <p>Gathering your own company data 184</p> <p>Protecting your company with a confidentiality agreement 187</p> <p><b>Chapter 13: Case Study: Valuation on the Sell Side 189</b></p> <p>Heading Off Common Valuation Disasters 190</p> <p>Writing down your wishes 190</p> <p>Making sure that your records are adequate 191</p> <p>Taking time to plan 192</p> <p>Considering confidentiality 192</p> <p>Setting Up Your Prevaluation Plan 192</p> <p>Finding the problems 193</p> <p>Analyzing the prevaluation 195</p> <p>Performing the Valuation 196</p> <p>Taking valuation from fantasy to reality 196</p> <p>Checking the structure of the deal 200</p> <p>Looking at an example of a deal in progress 201</p> <p><b>Part IV: If You’re Buying a Business 203</b></p> <p><b>Chapter 14: How Do You Know Whether You’re Ready to Buy? 205</b></p> <p>Knowing What Typically Drives a Business Purchase 205</p> <p>Getting Ready to Buy 206</p> <p>Tackling challenges unique to buyers 207</p> <p>Looking at whether the business is right for you 208</p> <p>Evaluating a failing business 209</p> <p>Understanding how the mating process (typically) works 211</p> <p>Restarting the Value Process 213</p> <p><b>Chapter 15: Moving from Valuation to Negotiation 215</b></p> <p>Knowing What Valuation Does for the Dealmaking Process 216</p> <p>Identifying potential pitfalls and opportunities 216</p> <p>Timing the purchase well 216</p> <p>Minimizing emotional shocks 217</p> <p>Getting Ready to Meet the Seller 217</p> <p>Recognizing window dressing 218</p> <p>Remembering motives 218</p> <p>Knowing what sellers want 219</p> <p>Let’s Make a Deal: Negotiating 219</p> <p>Deciding whether to handle negotiations yourself 219</p> <p>Getting ready to negotiate 220</p> <p>Understanding what you should do in negotiation 222</p> <p>Working with someone who’s negotiating for you 223</p> <p><b>Chapter 16: Due Diligence on the Buy Side 225</b></p> <p>Seeing What Due Diligence Means in Practice 225</p> <p>Looking at the Unoffi cial First Stages of Due Diligence 226</p> <p>Researching the company 227</p> <p>Consulting your family and the pros 228</p> <p>The Informational Game Plan: Cracking the Books (and the Internet) 229</p> <p>Gathering the Company’s Data 231</p> <p>Knowing which questions to ask about the target company 232</p> <p>Checking with the company’s departments 233</p> <p>Collecting Outside Data about Your Industry and the Economy 235</p> <p><b>Chapter 17: Forensic Accounting and the Due Diligence Process 239</b></p> <p>Understanding Forensic Accountants 239</p> <p>Characterizing a qualifi ed forensic accountant 240</p> <p>Recognizing situations that link forensic accounting and valuation 243</p> <p>Comparing Basic and Forensic Accounting 246</p> <p>Recognizing Business Situations That Trigger Forensic Accounting 247</p> <p>Doing a Forensic Accounting Test 248</p> <p>Looking at Forensic Accounting Case Studies 249</p> <p><b>Chapter 18: Case Study: Valuation on the Buy Side 251</b></p> <p>Being Frank: Selecting an Industry 251</p> <p>Doing Research in Advance 252</p> <p>Contacting the Target 253</p> <p>Negotiating the quick-and-dirty valuation stage 253</p> <p>Knowing when to talk and when to hang up 254</p> <p>Moving on to Company Number Two 254</p> <p>Seeing How Failing to Consult an Advisor Can Cost You 255</p> <p>Knowing when to involve advisors 255</p> <p>Encountering problems 256</p> <p>Seeing what could’ve been done 258</p> <p>Checking Benchmarking Data 258</p> <p>Understanding Deal Structure 259</p> <p><b>Part V: Don’t Try This at Home! Turning Things Over to the Valuation Experts 261</b></p> <p><b>Chapter 19: Divorce 263</b></p> <p>Doing Estate Planning Regardless of Marital Status 263</p> <p>Planning Prenuptial and Postnuptial Agreements 264</p> <p>Breaking down a prenuptial agreement 265</p> <p>Creating a postnuptial agreement 267</p> <p>Seeking the Correct Professionals 267</p> <p>Looking at What Happens to a Family Business in Divorce 268</p> <p>State laws on splitting property 270</p> <p>The marital balance of power 271</p> <p>Determining the Business Value in a Divorce 272</p> <p>Keeping Valuation Dates in Mind 273</p> <p><b>Chapter 20: Estate Planning and Gifting 275</b></p> <p>Succession Planning: A Critical Part of Business Planning 276</p> <p>Considering Family Matters 276</p> <p>Anticipating problems 276</p> <p>Considering blended and nontraditional families 277</p> <p>Creating contingency plans for relatives who renege 278</p> <p>Creating a Succession Plan 279</p> <p>Creating an Estate Plan 280</p> <p>Finding the Experts You Need for Estate Planning 281</p> <p>Fitting Buy/Sell Agreements into Estate Planning and Valuation 282</p> <p>Taking Gifting into Consideration 283</p> <p>Gifting strategies 283</p> <p>Gifting techniques 284</p> <p><b>Chapter 21: Attracting Outside Investors to Your Startup 287</b></p> <p>Exploring Your Startup Resources 288</p> <p>Seeing How Valuation Professionals Work with Startups 290</p> <p>Creating the Starting Point: The Business Plan 291</p> <p>Working with Investors 292</p> <p>Angel investors 293</p> <p>Venture capitalists 294</p> <p>IPO investors 295</p> <p><b>Part VI: The Part of Tens 297</b></p> <p><b>Chapter 22: Ten Reasons to Consider a Prenup 299</b></p> <p>It Gets You to Talk Honestly about Money at the Start of a Marriage 300</p> <p>Your Life’s Work Shouldn’t Go down the Drain 300</p> <p>If Both Spouses Have Sacrificed to Build the Business, They Need to Share 301</p> <p>The Working Spouse Shouldn’t Lose the Business Entirely 302</p> <p>Kids from Earlier Marriages Need Protection 302</p> <p>Kids from Your Next Marriage Need Protection, Too 304</p> <p>Planning for Worst-Case Scenarios Is a Good Habit 304</p> <p>Your Business and Personal Finances Really Are Connected 305</p> <p>Family Legacies Need Protection 305</p> <p>When a Marriage Ends, a Prenup (Or Postnup) Can Save You Both Money 306</p> <p><b>Chapter 23: Ten Questions to Answer Before Considering a Partnership Agreement 307</b></p> <p>Who Will Be in the Partnership? 308</p> <p>How Much Capital Does Each Partner Have to Kick In at the Start? 308</p> <p>How Will Decisions Be Made? 309</p> <p>Do You Have a Plan for Resolving Disputes? 309</p> <p>How Will the Firm Admit New Partners? 310</p> <p>How and When Will Profits — or Losses — Be Shared? 310</p> <p>What Happens If a Partner Leaves or Dies? 311</p> <p>How Will the Partnership Be Sold or Dissolved? 311</p> <p>How Will Legal Disputes inside and outside the Partnership Be Handled? 312</p> <p>Will Noncompete Issues Be Covered? 312</p> <p><b>Chapter 24: Ten Things to Consider Before Transforming Your Company Into an ESOP 313</b></p> <p>Research How ESOPs Are Created 314</p> <p>Understand Why ESOPs Are Attractive in Certain Situations 314</p> <p>Know How the Tax Advantages Work 315</p> <p>Examine How Valuation Comes In 316</p> <p>Get a Handle on Your Launch Steps 316</p> <p>Prepare for Preparation Costs 317</p> <p>Get Ready to Train Next-Generation Leadership 317</p> <p>Plan Ongoing Training for Employees 318</p> <p>Estimate ESOP Costs after Launch 318</p> <p>Realize That ESOPs Can Fail 318</p> <p>Glossary 319</p> <p>Index 327</p>
<p><b>Lisa Holton </b>is a former business editor and reporter for the <i>Chicago Sun-Times.</i> Today, she heads The Lisa Company, a writing, editing, and research firm. She’s a writer for corporations, colleges, and nonprofits nationwide, and has written more than 13 books.</p> <p><b>Jim Bates </b>is Vice President, Transaction Support, for the Christman Group, a middle-market investment banking firm based in Palatine, IL
<p><b>Your hands-on guide to calculating — and understanding — business value</b></p> <p>Want to determine the value of a business, but not sure where to start? This plain-English guide gives you step-by-step directions for the major valuation methods, supporting them with real-world examples. You’ll work with easy-to-understand valuation models and apply them to different types of businesses to achieve the fairest, most affordable valuation solution. <ul><li><b><i>Business valuation 101 — learn what it is, why it’s a challenge, and the approaches that experts take to uncover value (or the lack of it)</li> <li>Grasp key valuation tools — understand valuation reports, financial statements, and “rule of thumb” guidelines for specific businesses</li> <li>Get to the heart of it — analyze historical performance, evaluate assets and income value, and estimate cost of capital</li> <li>If you’re selling a business — see how to conduct due diligence and increase your company’s value</li> <li>If you’re buying a business — incorporate valuation into the necessary prep before negotiation</li> <li>Seek help from the experts — from divorce to estate planning to attracting outside investors, know when and why you should get outside valuation help</li></b></i></ul> <p><b>Open the book and find:</b> <ul><b><li>Real-world advice on planning andexecuting valuation</li> <li>The role of the supporting playersin the valuation process</li> <li>Detailed case studies on buyingand selling businesses</li> <li>How forensic accounting fits intovaluation</li> <li>The soft and hard skills needed forsuccessful valuation</li> <li>What to build into a partnershipagreement</li> <li>Why you should pause beforetransforming your company intoan ESOP</li></b></ul>