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Started By
Message
re: Many Baby Boomer businesses going for sale in the next 5-10 years.
Posted on 8/1/23 at 4:57 pm to CleverUserName
Posted on 8/1/23 at 4:57 pm to CleverUserName
quote:aka goodwill is the “plug” number to make the balance sheet balance.
And “goodwill” is not a made up term thrown out there to explain away a phenomenon. It’s GAAP accounting. You will see it in the financials of practically all major corporations that service the public
2
Posted on 8/1/23 at 5:03 pm to More beer please
quote:
Just purchased a business from someone above 70. He refused to accept an official 3rd party valuation of his business because he believed it was worth much more.
Sounds to me like it was
This post was edited on 8/1/23 at 5:04 pm
Posted on 8/1/23 at 5:08 pm to JohnnyKilroy
quote:
He refused to accept an official 3rd party valuation of his business because he believed it was worth much more.
quote:
Just purchased a business from someone above 70
So he beat your arse at the negotiating table?
Where in that post did you get that? He refused until he had no choice. It was bought for the valuation price.
The point was he had a number in his head and just thought that was what the business was worth.
Posted on 8/1/23 at 5:11 pm to CleverUserName
quote:
I mean.. what’s worth more. A McDonald’s restaurant franchise or a mom and pop burger place in an expensive building?
Fleur De Lis pizza ever sell?
Posted on 8/1/23 at 5:13 pm to White Bear
Been doing valuations in Texas for about 20 years. Goodwill is a term with a few definitions. In GAAP and doing purchase price accounting allocation it is the difference between what you paid for a company and the FMV of the assets acquired.
In valuing a company it is the intangible value above and beyond the mere value of the assets. Some company owners use it interchangeably as a term for the value of the business, which technically isn’t true. Several ways to quantify, could take an income approach and compare it to value of the assets, the remainder is “blue sky” or “goodwill.” This is what boomers try to get. Some companies have it, some don’t, totally depends on the industry and the company. You’re typically not going to have blue sky value if a potential buyer could simply open up their own company and compete equally with you. That blue sky money could also be attributed to the company or to you.
Valuation is fun. So many nuances to each project.
In valuing a company it is the intangible value above and beyond the mere value of the assets. Some company owners use it interchangeably as a term for the value of the business, which technically isn’t true. Several ways to quantify, could take an income approach and compare it to value of the assets, the remainder is “blue sky” or “goodwill.” This is what boomers try to get. Some companies have it, some don’t, totally depends on the industry and the company. You’re typically not going to have blue sky value if a potential buyer could simply open up their own company and compete equally with you. That blue sky money could also be attributed to the company or to you.
Valuation is fun. So many nuances to each project.
This post was edited on 8/1/23 at 5:24 pm
Posted on 8/1/23 at 5:17 pm to White Bear
quote:
aka goodwill is the “plug” number to make the balance sheet balance.
Well. No. It’s not.
Public companies are required to keep goodwill accurate, review it once a fiscal year, and report any impairment. Per Sarbanes-Oxley.
Posted on 8/1/23 at 5:17 pm to financetiger38
quote:
Find some new material. Your shite is whack.
quote:
Paul Allen
The lack of self awareness here is rich
I believe that the value of his material must remain high because the supply is limited
Posted on 8/1/23 at 5:30 pm to billjamin
quote:
I've seen dozens of construction companies lately coming in hot with 4-5X expectations
I was a signature away from buying a construction company that was shutting down a few years ago. Ultimately they wanted to retain the name and keep using the insurance.
All I wanted was the equipment a few MSAs they had and their EMR. I’m glad it didn’t work out in hindsight and they probably regret it falling apart.
Posted on 8/1/23 at 5:38 pm to LootieandtheBlowfish
For small businesses based on the blood, sweat, and tears of the owner I would tend to think you would be better off starting up your own similar business than buying. At least that's been my observation for friends who tried the different options.
When you are both the owner and the grunt bearing the weight of the workload your ability (plus debt load and luck) seem to determine the outcome more than the name that used to be on the shingle.
When you are both the owner and the grunt bearing the weight of the workload your ability (plus debt load and luck) seem to determine the outcome more than the name that used to be on the shingle.
Posted on 8/1/23 at 5:55 pm to BayouBengal23
Cause when they got in there were still old buildings for rent, and rent, mortgages weren't freaking sky high.
Posted on 8/1/23 at 6:16 pm to More beer please
quote:
Where in that post did you get that?
The part where you said he refused to accept the fmv.
You left out the part where you got him to agree to your number.
Posted on 8/1/23 at 6:17 pm to billjamin
quote:
Should get interesting considering how delusional a lot of them are about the value of their businesses. Reality check inbound.
So you just want a cheap deal.
The numbers are the numbers, what they pay taxes on have a multiplier of how much it's worth. Try to get it cheaper but it might not work. Posted on 8/1/23 at 6:18 pm to JumpingTheShark
This is all pretty interesting to me. I’ve turned down two offers to buy my business. The last one was 4yrs ago and we’ve grown our business 2.5x’s since then. It’s not that the offer was bad but I wasn’t ready.
I’ve never had an evaluation of what it’s worth. Just never really concerned me really. Been at this 20 yrs, prob got 3-4 left in me!
I’ve never had an evaluation of what it’s worth. Just never really concerned me really. Been at this 20 yrs, prob got 3-4 left in me!
Posted on 8/1/23 at 6:27 pm to Hangit
quote:
I know a lot of people who will not be passing on the family business to the kids. Say they are pulling $250k per year out of the burger stand. The kid goes to Med school and has zero interest in owning the burger stand.
Some people just have the calling.
But let’s look it at like this.
quote:
it takes between 10 to 14 years to become a fully licensed doctor.
Cost of med school and actual time it takes, you could have been pulling 250k a year instead in your scenario? Start your retirement savings earlier… idk seems tempting.
Posted on 8/1/23 at 6:35 pm to WilsonPickett
Also if you want to throw your phone or punch your computer - the business buying Twitter world is terrible. Just search “silver tsunami” and let the rage flow at the idiot takes.
Posted on 8/1/23 at 6:36 pm to JumpingTheShark
quote:
Been doing valuations in Texas for about 20 years. Goodwill is a term with a few definitions. In GAAP and doing purchase price accounting allocation it is the difference between what you paid for a company and the FMV of the assets acquired. In valuing a company it is the intangible value above and beyond the mere value of the assets. Some company owners use it interchangeably as a term for the value of the business, which technically isn’t true. Several ways to quantify, could take an income approach and compare it to value of the assets, the remainder is “blue sky” or “goodwill.” This is what boomers try to get. Some companies have it, some don’t, totally depends on the industry and the company. You’re typically not going to have blue sky value if a potential buyer could simply open up their own company and compete equally with you. That blue sky money could also be attributed to the company or to you.
Rt, this is also why people have a value in franchising. You are getting the brand loyalty, their name, if a restaurant, their recipes.
There is value beyond just the assets.
Posted on 8/1/23 at 6:50 pm to billjamin
quote:examples? Not calling you a liar , just want to know
Should get interesting considering how delusional a lot of them are about the value of their businesses. Reality check inbound
Posted on 8/1/23 at 6:54 pm to 6R12
quote:
what they pay taxes on have a multiplier of how much it's worth.
What’s your multiplier? How do you value any IP on top of the editda multiple? Do you give them any fixed asset value? Useful life or more? Was it taken care of or a bunch of junk? Do you value it all the same? Etc?
This post was edited on 8/1/23 at 6:57 pm
Posted on 8/1/23 at 6:55 pm to BayouBengal23
Anyone looking to get into oilfield software, let me know.
Posted on 8/1/23 at 6:59 pm to el Gaucho
quote::-|
Like demanding we give israel 20 trillion a year so they can “rebuild the temple of Jerusalem”?
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