The Art of Business Valuation: Accurately Valuing a Small Business This is a book review of The Art of Busines Valuation: Accurately Valuing a Small Business. This book is a guide and desk reference for valuing businesses under $10 million in revenues. The primary question answered in the book is: How do we as business valuators, business brokers, accountants, lawyers, owners, and other interested parties prepare, review, evaluate, or use an accurate business valuation for small and very small businesses in a difficult environment? A business valuation is not just a matter of applying techniques, it has to make sense.…
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COVID-19’s Impact on Micro and Small Business Valuation As summer comes to an end, while COVID-19 remains a concern, business owners have resumed contemplating their succession and growth strategies. What have valuation analysts learned? In this article, the author shares additional questions that business valuation practitioners should be asking. The hysteria from the huge unforeseen social and economic changes arising from COVID-19 is starting to fade. For business valuators that means we are seeing our normal valuation processes and procedures, with modifications, are sufficient to value micro and very small businesses with revenues under 10 million dollars. These modifications mean…
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For When a Client Wants to Buy a Business The authors in this article share a checklist developed and provided to firm clients contemplating buying a business. The following are key steps involved when a client wants to buy a business. Buyers and their advisors can use this list as a timeline and road map of the steps that are expected to occur, and what they should plan on doing. A companion posting for clients that want to sell a business can be found at: https://quickreadbuzz.com/2020/06/17/business-valuation-ed-mendlowitz-task-list/ The buyer needs to make sure the seller wants to sell. The seller saying…
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For When a Client Wants to Sell Their Business The authors in this article share a checklist developed and provided to firm clients contemplating a sell of their business. Following are the steps involved when a client wants to sell their business. Buyers can also use this list as a timeline and road map of the steps that are expected to occur and what is expected of them. ❏ Be sure client wants to sell ❏ Be doubly sure client wants to sell. Them saying it does not make it so. Many prospective sellers start the process but do not…
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Using Forensic Accounting Valuing the small business is how most valuators earn their living. These small businesses pose as much issues to valuation professionals as they do for tax, accounting, and legal professionals by providing these entities with advice. The issues are wide-ranging, and the purpose of this article is not to patronize small business owners; rather, the purpose of this article is to discuss the challenges we in the valuation community face when valuing small businesses and how forensic accounting techniques can help. [su_pullquote align=”right”]Resources: Forensic Accounting Academy Forensic Accounting Specialty Webinars Forensic Accounting Techniques in Business Appraisals Financial…
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Obtaining Adequate Information in Small Business Valuations As valuation professionals, one of the challenges we face in valuing small businesses is the quality of the financial information provided by the subject company. The NACVA professional standards require members to exercise due professional care and obtain sufficient relevant data to prepare a conclusion, recommendation, or position. In this article, Michael Bankus lists several suggestions to obtain adequate information to complete the engagement of a small business.
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Small Business Borrowing Falls to Lowest Point Since October Small business borrowing fell in April to its lowest point since October and was down five percent from April 2016, according to the Thomson Reuters/PayNet Small Business Lending Index. The drop is seen as an indicator of potentially slowing economic growth. To read the full article in Reuters, click: U.S. Small Business Borrowing Drops to Six Month Low.
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2016 Saw Record Number of Small Businesses Sold The 7,842 closed deals in 2016 were a record high for business sales, according to BizBuySell. Gene Marks, Marks Group owner, explains that the factors driving the trend were strong business performance, low interest rates, and owners’ desire to retire. To read the full article in The Washington Post, click: A Record Number of Small Business Owners are Selling Their Companies.
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Help Your Small-Business Clients Create a System for Record Keeping Good record-keeping preparation and planning can give clients a better handle on their overall financial position, make tax preparation easier, and create operational efficiencies throughout their businesses. A helpful record-keeping brochure and PowerPoint presentation can help you educate your small-business clients. To download the brochure and presentation, click: CPA Marketing Toolkit for Small Business.
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Creating Value for Business Owners and Board Members In this article, Edward Mendlowitz, CPA, ABA, CFF. shares his views regarding the importance of having a business valued. He identifies 50 ways that a valuation professional can provide something far more valuable than a number. While the valuation profession is under pressure to reduce costs or prepare a report, the business owner is better served in the long run retaining a valuation professional that provides greater insight to operations.
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A two-way street In this article, Britt Madden and Britt Madden, Jr. respond to Jim Hitchner’s July 2013 QuickRead article on “Rigging the Cost of Equity”. The authors contend that the rigging is more likely the result of a lack of understanding the current status of small business in the present economy, which has left it forever changed.
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Last Month’s Fiscal Cliff Legislation Included Lots of Tax Provisions. But Not Just for Individuals — There Are Tax-Saving Breaks for Businesses Too. Here’s What You Need to Know. Bill Bischoff at The Wall Street Journal Small Business Blog reports that last month’s fiscal cliff legislation included some important tax breaks for individuals; a longer version of his article appears at MarketWatch. Here’s the short list.
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Accounting Isn’t Just a Necessary Evil; Sometimes the Methods Can be Used as a Key Part of Your Business Strategy Jeff Haden at Inc. answers a question from a reader who wonders if it matters what inventory accounting method she uses. It does! Here’s some explanation, and specific advice:
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For Nearly Five Decades, Securities Law Allowed Banks with Fewer than 300 Shareholders to “Deregister,” Now, Banks With Under 1200 Shareholders Can Do the Same Under Provisions of the JOBS Act Dina ElBoghdady reports some interesting news this week in the Washington Post: about 100 small banks have stopped reporting financial details about their operations to the SEC since the JOBS Act was enacted in April About 100 small banks have stopped reporting financial details about their operations (e.g., revenue, expenses, executive compensation and trends affecting their businesses, etc.).to the Securities and Exchange Commission since April, when a law was enacted that…
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Six Out of 10 Small-Business Owners Buy Business Benefits of Social Media; 41% Prefer LinkedIn; Only 3% Vouch for Twitter Not that that stopped Twitter from getting a $9B valuation this last week. Emily Maltby and Shira Ovide report that the Wall Street Journal and Vistage International recently surveyed 835 small business owners. Here are the results.
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With Limited Resources, the SEC is Using a “Risk Analytics” Strategy to Target Areas of Concern, Explains Exec at Conference Recent examinations of newly SEC-registered private equity firms is helping regulators understand the complex world of private equity, according to delegates and speakers at PEI’s CFOs and COOs Forum 2013 in New York, writes Nicholas Donato at Private Equity Manager. More:
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Ahead of the new health-care law, small firms worry about crossing the crucial 50-person threshold — and about rising premium rates Emily Maltby at the WSJ Law blog reports on increasing concerns about the forthcoming healthcare laws among small business owners. This seems to be a prominent issue and concern among small business owners, and has been noted in most every major media outlet in recent weeks, from the New York Times to Forbes, CNN, US News & World Report, FoxNews, The Economist, The Hill, the Washington Post, and more:
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Here are four surprising ways to protect yourself in a law suit and keep legal fees to a minimum. Kevin Daum at Inc. advises: “Shakespeare said, “First kill all the lawyers.” Maybe this seems a tad aggressive, but then again, for most people the last thing you look forward to is someone showing up at your door with a subpoena. Whether a lawsuit is business related or personal, the thought of engaging an attorney for protracted litigation can strike fear into a person’s heart.” Not only is there emotion and argument to contend with, but the sheer agony of…
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Some Stakeholders Suggest Improvements to Segment Reporting Information A 1996 accounting standard established to improve the way public companies report financial information about their business segments generally achieves that purpose, although some stakeholders suggest improvements. That was the overall conclusion of the post-implementation review (PIR) of Financial Accounting Standards Board (FASB) Statement No. 131, Disclosures about Segments of an Enterprise and Related Information (codified in Accounting Standards Codification Topic 280, Segment Reporting). The PIR process was established by the Financial Accounting Foundation (FAF) in 2010. The Financial Accounting Foundation elaborates:
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Qualifying Offices Can Deduct Up to $1,500 Per Year Michael Cohn at Accounting Today reports that The Internal Revenue Service plans to introduce a simplified way for small business owners and home-based employees to claim the home office tax deduction.