Most businesses today are sold on a simple basis of EBIT multiples (EBIT being the technical term meaning earnings before interest and tax – the base measure of ongoing profitability of the business) where the seller simply accepts conventional or marketplace valuation norms. Most owners don’t understand that by preparing a business for sale they can move outside the norm and access considerably improved valuations. (more…)
As business owners seek better ways to attract , retain and motivate key employees to lock in performance and build wealth, we find they often do not look at equity as a means to manage this – they have been long condiitoned to use income as the means to manage performance – pay increases, bonuses and overtime are the most common tools of employee performance management.
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A recent national online survey of small and medium sized enterprises conducted by KPMG, provides a picture of how businesses are responding to the changed economic environment and what the outlook is for 2009. Of great interest to us should be the number of people surveyed who are looking at acquisitions or buying assets from competitors. (more…)
According to some recent research by AXA and Monash University, family business and succession are not always a healthy mix – in Victoria alone of third or forth generation family businesses:
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