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What Is The Value Of Your Business?

November 16th, 2009 by Matthew C. Keegan | 2 Comments | Filed in Business Services

Business owners may wonder what the recession has done to the value of their enterprise. Sales are down, market share may have eroded, and demand for your products may have changed dramatically since before the recession officially got started in December 2007.

balance sheetEven though the federal government has declared the recession over, the residual effects of high unemployment, changing customer tastes, and continued market uncertainty has many people carefully weighing their purchases.

Business Valuation

If you were to sell your business today, how much do you think you would get for it? Obtaining comps of recent sales for businesses like yours is one approach, but ultimately the value of your business is determined by one thing: what someone is willing to pay for it.

According to Krayton M Davis of the National Association of Certified Business Brokers (NACBB), “If the buyer perceives that the value of business is great, they will pay a higher price. That will be dependent on the buyers needs, strategy, and resources. That is why you should target your selling strategy to those buyers who will perceive your offering at a greater value.”

Mathematical Formula

In other words the valuation is more psychological then based on a mathematical formula.

Certainly, having some sort formula based on modified cash position, asset holdings, market strength, and company valuation can be helpful in giving you a ballpark figure but the price is ultimately determined by what a customer is willing to pay for your business as well as what you’re willing to sell it for.

Estimating Business Value

One way to quickly estimate your business value is to take a modified cash position and times it by a factor such as 2, 2.25, 2.5 or more. For example, if your modified cash position is $50,000, then your business might be worth $100,000, perhaps as much as $125,000 or more.

Of course, that factor will vary by industry which is why a professional valuation is the best approach when determining your modified cash position and worth.

Value by Current Assets and Cash Flow

For a more precise estimate, you’ll want to consider your assets and accounts receivable. To determine that you’ll need to add in current assets, current receivables, and current cash flow to come up with an estimated value.

Again, this formula isn’t perfect which means that if you’re wanting to get the most for your business, then you should seek professional guidance to determine its value.


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What?! You Still Don’t Have A Website?

November 4th, 2009 by Matthew C. Keegan | 2 Comments | Filed in Business Services

We’re nearly a full decade beyond the turn of the millennium, that age when the stars and planets aligned, world peace broke out, and businesses took advantage of their online presence.

Okay, the first two points are an exaggeration but not the third one: you do have a business website, right?

handshakeSurprisingly, a number of businesses still operate almost completely offline with barely a web page visible to announce what they are all about. Operating without a website in 1999 was risky, but still conceivable. But as we approach 2010, being without a website means your customers simply aren’t finding you.

Yes, the Yellow Pages are still a popular way for businesses to connect with customers, but chances are your younger customers only use those books as door stops or kindling for the fireplace. Mostly everyone under the age of 60 uses the internet while virtually everyone in their 20s and 30s shops exclusively online.

If you’re not plugged in to the world wide web, then you’re missing potential customers. And lost customers mean squandered sales. Can you afford to not have a solid web presence?

There are some basics you need with any site to help you start, build, and advance your web presence including the following:

Domain Name – A domain represents your internet address, the words people will use to find you. For example, if you owned Bob’s Furniture Shoppe, then you would more than likely secure www.bobsfurnitureshoppe.com as your domain name. If you don’t secure your domain your competitors might, redirecting what should be your traffic to their website.

Your Site – Once you have secured your domain name, then you’ll want to begin building your site. At this point, you’ll want to hire someone to do that work for you. They’ll create a home page, as well as About, Contact, FAQs, Links, Articles and other pages to get you started. Certainly, if you have the skills you can do this work yourself, using straight HTML pages or a php based blogging platform such as WordPress to help you get the job done.

Web Hosting – Web hosting plans remain quite inexpensive, costing less than $10 per month for shared hosting. This means that you’ll be able to operate your own site, but you’ll share the internet protocol (I.P.) address with others. Your customers will still be able to find you, whether you have shared hosting or not.

E-Commerce/Sales – Of course, if you plan on conducting business online or reaching customers to complete sales online, then you’ll need to establish an Electronic Commerce or E-Commerce site to expand your business. Your e-Commerce strategy can include a comprehensive channel for information, sales inquiries, sales processing, sales fulfillment, and integrated logistic support. A consultant can help you outline your strategy and manage the process based on your channel objectives and budget.

Opportunity Awaits

Don’t let another decade, year or even a month go by without establishing your web presence or bolstering the site you already own. Your customers are waiting, but you need to give them a clear, online path to help them find you.

Adv. — For help establishing a web presence or to expand your current online business, please contact Krayton M Davis of nBuy Associates for assistance:

T: 804.527.1103
E: kdavis@nbuy.com
W: www.nBuy.com


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Self Employed? Home Loans For You!

November 2nd, 2009 by Matthew C. Keegan | 1 Comment | Filed in Home Financing

For the self employed, you know one important way to hold down your tax obligations is to find as many deductibles as possible. After all, you work hard — why allow Uncle Sam to take more money from you then “he” should? One way to limit your pay out is to buy a home.

Loan Documentation

fall leavesUnfortunately, one of the more difficult things for you to do is to document your income, something that most lenders required in today’s economic environment. A few years back, lenders would have issued no-documentation mortgages, but those practices died with the mortgage collapse of 2008.

Home loan brokers will want you to substantiate your income in a number of different ways. If you pay yourself, then you can show your last two or three pay stubs as well as W2 forms for the past two years. However, that may not be possible for some self employed people particularly if you take money out of your business as a disbursement, not salary.

Financial Information

If that’s your situation, then you understand that you’ll need to work with a mortgage broker who understands the unique needs of the self employed. Some lenders are fine with less documentation, however they are likely to want you to provide some financial details about yourself including the following:

  • Your checking and savings account statements for at least the last three months.
  • Copies of your federal and state income tax returns for the past two or three years.
  • A copy of your business’s articles of incorporation in addition to business checking account statements.

Don’t worry about being rejected, especially if you have very good credit. Lenders are in the business of lending people money and they can only make money off of you if you borrow from them. Consequently, every loan applicant is treated as a possible client and lenders will bend over backwards to try to find a way for you.

Credit Reports

Keep in mind that your mortgage lender will obtain all three copies of your credit reports and credit scores from Experian, Equifax and Trans Union to help them make their determination. You may be asked to come up with a larger down payment, particularly if your income fluctuates. That doesn’t mean you won’t be approved for a home loan, rather that the lender wants you to assume a greater portion of the risk.

Finally, if you are not getting the satisfaction you expect, try a different mortgage broker. Some brokers are very tight with their lending requirements while others are cautious, but still willing to take a risk on you if you have a track record of very good credit.

Adv. – Mortgage interest rates remain near historic lows.  Whether buying new and refinancing your current home, you’ll want to take advantage of low rates before inflation kicks in. Please stop by PickMyMortgage.com or SayLending.com to find the best home financing options available.


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More Back To School Shopping Tips

August 13th, 2009 by Matthew C. Keegan | 2 Comments | Filed in Consumer Tips

Back on July 27th, we featured several tips which were designed to help “back to school” shoppers save money as they prepare their kids for school this academic year. A number of school districts are already in session while the remaining districts will get started over the coming month or so. But many parents are still shopping for their kids, taking advantage of tax free weekends in a bid to save cash.

backpackThanks to conversations we’ve had with parents who do the shopping, SayEducate has compiled some additional tips which can help you save money when searching for “back to school” bargains including the following:

Clip Coupons – We left this one off of the list thinking that coupon cutting and back to school didn’t go hand in hand. Sure enough, a neighbor came over to our house the day before the big sale started, handing us a 40% off coupon for the local craft store. Turns out that this store carried certain colored pencils not found elsewhere, yielding significant savings for our family.

Buy In Bulk – One of the mothers of our children’s classmates made an important point and that was to anticipate some of your supplies running out mid-year. Just when you think you have enough ruled paper or colored folders for the next nine months, you may be out of stock come January. Why not stock up on things being sold for “back to school” prices instead of paying full price come winter? Whatever you don’t use can probably be set aside for the following school year.

Shop Used – One parent remarked that her son’s high school now requires students to have a laptop. Thinking that every student of a certain age already had their own computer, I didn’t realize that some schools had this requirement. Most decent laptops cost at least $500, a big expense for many families. However, one of our local PC repair stores sells refurbished laptops for about $150 to $250, with open source software installed. Best of all, her son’s computer is powered by Windows XP not the dreaded Windows VISTA program.

Keep Receipts –  In our first article we encouraged people to delay some of their purchase in the event that something on the “back to school” list isn’t really needed. But, should you go ahead and make a purchase, keep your receipts handy in order to get a refund or credit later. Why get stuck with a backpack your child really doesn’t want or need?

Finally, you’ll want to come up with a shopping plan before you head out, one based on securing items you need and within your budget. We’ve learned that some families with two or more children are spending at least $500 this school year which explains why “back to school” time is the second most profitable shopping season for retailers after Christmas.

Adv. — You can get ready for hurricane season by stocking up on all of the essentials needed to keep your family fed and safe. Visit nBuy.com for all of your shopping needs including travel, home, car and school supplies.


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