Owner Personality Strongly Affects Business Value. Learn How. As consultants work with business owners to plan successful exit options, it’s helpful to spend some time thinking about how the business was built. Paul Brown here describes how different owner personality types—described here as “Mountain Lions,” “Wolf Packs,” “Beavers,” or “Ants”—tend to build quite different sorts of businesses. Different approaches to taking risk, building management strength, and investing in long-term business structure can radically affect final business value. Here’s how.
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Medical Practice Benchmarking, Financial Performance, and Quality Care Benchmarking physician practices is an important way to assess practice value by comparing a practice’s norms to peer practices in similar specialties or in the same geographic reason. Most physician practices, according to experts, can benefit substantially from benchmarking. Moreover, it’s pretty easy to do! Here David Fein discusses what he’s discovered about the process and its benefits.
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Thursday, May 23, 2013Business Valuation Webinar Week: Valuation Issues of Renewable Energy InterestsTime: 11:00 a.m.-12:00 p.m. Pacific / 12:00 p.m.-1:00 p.m. Mountain / 1:00 p.m.-2:00 p.m. Central / 2:00 p.m.-3:00 p.m. EasternCPE: 1 hourPrice: $145.00 Purchase Webinar Thursday, May 23, 2013Valuation Databases to Improve Efficiency—Using Duff & Phelps Risk Premium Report and Risk Premium CalculatorTime: 11:00 a.m.-1:00 p.m. Pacific / 12:00 p.m.-2:00 p.m. Mountain / 1:00 p.m.-3:00 p.m. Central / 2:00 p.m.-4:00 p.m. EasternCPE: 0 hourPrice: $0.00 Purchase Webinar Thursday, May 23, 2013Valuation Databases to Improve Efficiency—Using Duff & Phelps Risk Premium Report and Risk Premium CalculatorTime: 11:00 a.m.-1:00 p.m. Pacific /…
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What Data Valuators Need from Physician Practices—and Why! Physician practices are increasingly undergoing consolidation. Often that means being acquired by a hospital, and a prerequisite of being acquired is having a valuation performed by an independent, third-party valuator. Here’s information on the sort of data that valuators need (and that physician practices should be collecting today), an explanation of why valuators need that information, and how they use it.
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Learn How to Set up Prevention Systems, Identify Relevant Data Relationships, and Think Outside the Box There generally are three types of people who commit fraud: die-hard criminals, otherwise honest people who give in to temptation, and otherwise honest people under severe stress. Strong internal control programs can help two of these types from making a catastrophic mistake. Here’s how to protect revenue and discourage criminal behavior.
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GigaOm M&A Advisor: “Sales Don’t Create Value. What You Do Creates Value.” GigaOm M&A Advisor Marty Wolf explains how, especially in the tech field, five great ways to destroy your company include: 1. Opportunistic acquisitions 2. Growth for the sake of growth 3. Weak balance sheet 4. Convoluted ownership structures 5. Missing the window on a liquidity event How does this play out in the real world? Just look at Cisco, writes Wolf. Over the span of 10 years, Cisco’s sales rose nearly 94 percent while its enterprise value actually declined 29 percent. Read the whole thing.
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Good Grasp on Value Enables Better Tax & Retirement Planning, Reduces Conflicts The Washington Post’s On Small Business blog cites data from a variety of sources that indicate most small business owners don’t have a good grasp on the value of their business. Written by Gerald Radican, the piece on the Post blog cites these findings from Spardata, a Maryland-based valuation firm: A typical business owner misjudges the value of his or her company by 59 percent. That’s because business owners often choose to estimate the value based on what other businesses in the same industry are valued. Such rationale assumes…
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In United States v. David A. Taylor IRS Lays Down the Law The Wills, Trusts, and Estates Prof blog reports on a recent case demonstrating that if a fiduciary has a duty to pay a claim of the government before paying a debt—or they may be personally liable for the unpaid claims of the government! Here are some of the case details: David J. Tyler and Paula I. Tyler were a married couple who held real property on Cricket Lane in Pennsylvania as tenants by the entirety. The IRS issued deficiencies for their income taxes from 1992-1998. On August 20,…
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Weeding out Junk Science? Or Scaring Off Competent Experts? Are Daubert challenges really weeding out “junk science” and “pseudoscience” in the courtroom, or could it be that they are actually scaring off good, competent experts? Given the numbers alone, one can’t help but wonder. Bullseye, a Legal Blog on Expert Topics, reports on a new study that examines the question. Since the U.S. Supreme Court’s 1999 decision in Kumho Tire Co. v. Carmichael, which established that the criteria set forth in Daubert applied to other types of expert testimony – not just that of a scientific nature – the number of Daubert challenges has risen sharply. While…
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New Medical Billing-Code Provides Precision; Nine Codes for Macaw Mishaps Today, hospitals and doctors use a system of about 18,000 codes to describe medical services in bills they send to insurers, Anna Wilde Matthews reported in the Wall Street Journal not too long ago. Apparently, that doesn’t allow for quite enough nuance.: A new federally mandated version will expand the number to around 140,000—adding codes that describe precisely what bone was broken, or which artery is receiving a stent. It will also have a code for recording that a patient’s injury occurred in a chicken coop. (See code.) Indeed, health plans…
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There’s No Accounting for the Subscription Economy It’s taken over 10 years to get the idea of the subscription economy into our noggins, but we’ve barely started internalizing what it takes to support it and report on it as a business, reports Dennis Pombriant at CRM Buyer. Add “Accounting” for 32 Points and a Triple Score “Wall Street types are very accustomed to companies selling products rather than subscriptions,” he reports. But “subscriptions have a mixed bag of revenue recognition ideas that challenge the status quo”: . . . Subscriptions as a way of doing business are just about everywhere;…
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The Unjustly Neglected “Margin Call” Ross Douthat at the New York Times thinks the Oscars missed crediting an important film this year: Speaking of Noah Millman, reading his Oscar post reminds me that my own comments on the year in movies neglected to mention what was perhaps the most striking injustice of the Best Picture nominations: The lack of any love for “Margin Call,” which was, as Millman writes, “not only extremely well-written and well-acted … but an extremely rare effort to accurately depict the culture of Wall Street.” (Be sure to check out his perceptive take on the movie’s moral and professional dilemmas.) The movie did…
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Corporate Investigations Increasingly Aided with Digital Forensics Digital investigators can do more than retrieve data from devices. They can also use data to reconstruct past events to explain how computers were used to perpetrate wrongdoing. Info4Security has introduced a new column, the Forensic Technologist, which will be written by Ernst & Young’s Simon Placks and explore how computer forensics are used to assist corporate investigations. Computer forensic practitioners excel at reconstructing the past into a timeline. Like archaeologists, they excavate digital media and find the artefacts to evidence how that computer was used. We’re very good at finding out how things…
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Blame Disaster on Bad Inputs. Black-Scholes Works. The last few years have given us plenty of reasons to hate financial models. Models that promised to increase efficiency and manage risk became substitutes for common sense and justifications for greed. The real estate bubble was of course justified by them. Yet people at hedge funds and trading firms, using models to mint money, remain passionate believers. Another supporter is George Szpiro, a mathematician turned writer who recently released a book called Pricing The Future, about the history of the Black-Scholes equation, the most famous model in finance and the one that launched…
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Increased Scrutiny for Private Equity Valuations The U.S. Securities and Exchange Commission has started an informal inquiry of private equity firms, asking for a broad range of documents on how the funds value assets and who invests in them, reports Bloomberg’s BusinessWeek. The agency’s Los Angeles office last year sent letters to several firms asking for details on fund investments and the valuation of assets, as well as communication with clients, according to the copy of a letter obtained by Bloomberg News. Firms were asked to produce the documents by the end of last year. Private equity firms have come…
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How Divorce Can Affect Business Valuation Stanley Morganstern at the Ohio Family Law Observer reports that recent case in Ohio illustrates the difficulty of valuing business assets in a divorce. Courts should avoid “double dipping,” or counting a business’ income toward valuation and spousal support. Instead, judges are to separate current and future income from the business’ material assets before making the calculation. I previously discussed the issue of “double dipping” as it primarily pertained to the property nature and income component of retirement plans. As I mentioned, the issue is also relevant to business interests, particularly small business entities. The marital…
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Why PE and the Middle Market Tied the Knot Robert Teitelman at The Deal explains: . . . This is the first of six special issues The Deal magazine will dedicate to the middle market in 2012, with a particular emphasis on a participant that, over the past four decades, emerged from that vast and diverse pool of midmarket companies: private equity. The current political debate tends to overlook the fact that private equity was gestated within the middle market for a very good reason: Midmarket companies, unlike large-cap corporates, have long been relatively starved for capital. Family-owned companies wanted…
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The IRS’s ‘Dirty Dozen’ are Getting Old So opines Gail Perry at AccountingWeb: I for one am getting pretty bored with the tax scams on this list – they hardly change at all from year to year. It’s time for some creative criminals out there to come up with something new. From the comments section: My brother ran a Schedule C Anvil Repair Shop from his garage in order to claim home office deduction, depreciation, etc. He told me the freight bills were a killer. 🙂 Posted by John Hiatt from Valley Forge, PA on Feb 16, 2012 – 4:55 pm…
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The Ten Biggest Family Businesses in the U.S. Business Insurance lists them: Wal-Mart Wal-Mart is the world’s largest retailer and most successful family business of all time. In 1962, founder Sam Walton took his knowledge of discount retailing and opened the first Wal-Mart store in Rogers, Ark. It wasn’t long before Sam expanded his business and opened up hundreds, then thousands of stores worldwide. After Walton died in 1992, his empire was passed on to his wife and children. Rob Walton succeeded his father as chairman of Wal-Mart, and his brother, John, served on a company committee that oversaw Wal-Mart’s…
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Accounting for Nuts: Blame a misalignment of incentives for the scandal at Diamond Foods. The Wall Street Journal’s Holman Jenkins opines: “Business people talk about “alignment of incentives.” The lesson here may concern a peculiar misalignment of incentives.” He explains: Here’s the executive summary: Diamond was a cooperative owned by California walnut growers until it became a publicly traded company owned by shareholders in 2005. Lately reporters and a shortseller-connected analyst have been poking around a $60 million payment the company made to growers in September 2011, which some growers apparently understood to be a “topping up” payment because…