here’s what you’re looking for: edward mendlowitz

how to help a client who wants to sell their business. (hint: it’s about them, not you.)

by ed mendlowitz
202 questions and answers: managing an accounting practice

question: i have a client who’s thinking of selling his business, and he asked me to recommend a consultant to help him get his business in shape to sell. i am afraid that if he finds someone on his own i’ll lose control of the client. he might end up not selling and i could lose the client. i do not know anyone to recommend. what do you suggest i do?

more: valuing a family-owned business: eight options | business valuation comes down to cash flow | 50 ways to create value for business owners and board members | what earnings mean for a business valuation | use organization charts to rewrite the future | what clients don’t know about cost variances | why and how to track payroll costs
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ed’s response: i suggest that you decide what is best for the client and proceed that way. you can find consultants by contacting other cpas, attorneys, or business brokers that work in this area.

however, i also think that this is something where you can probably do most of the work yourself or through your firm. it is not a magic process, but a four-part process.

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the correct standard depends on the reason for the valuation.

by ed mendlowitz
77 ways to wow!

here are eight standards of value that a valuation analyst may need to consider and discuss with a client. each standard has a different set of rules, and the valuations can vary greatly. valuing a business is an art – not a science – even though careful calculations are made to arrive at an appraisal of the business. also provided are some insights regarding how these are used and how the valuation analyst can protect their client.

more: business valuation comes down to cash flow | 50 ways to create value for business owners and board members | what clients don’t know about cost variances | how to advise clients on allocating business resources | be wary of discounting prices | where is your firm in its lifecycle? | six kinds of loan covenants
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valuations of closely held family businesses are confusing because of the varied reasons, uses and purposes for the valuation. there is no one “right” way, because the value arrived at is contingent on the assumption used. this is confusing to many business owners.
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this step needs to come before proper financial planning can occur.

by ed mendlowitz
77 ways to wow!

business owners contemplating retirement should obtain a business valuation to determine the value of the business and whether the other resources will provide financial security. the conversation and successful engagement also require that the valuation analyst understand the owner’s motivating factors, or the qualitative information.

more: 50 ways to create value for business owners and board members | what earnings mean for a business valuation | why and how to track payroll costs | use constraints to make improvements | the role of strategy in pricing | wow clients with trend analysis | 26 ways to wreck a financial projection
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obtaining the right price is important but holding out for a larger value and deeming all other values lower than that as a “deal breaker” can be self-defeating to the owner seeking financial security. there are other ways to obtain the security. further, quibbling over a smaller amount can potentially undermine the long-term plan, which is to retire.
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