Valuation: Listen to the Experts to Know the Worth of Your Business

Transcript

Welcome to another episode of The Deal Board Podcast! In today’s episode, Andy and Jessica are addressing one of the most popular topics in the world of business sales: valuation; and for that, they are discussing with two top industry experts in valuation. Darren Mize from GCF Valuations gives a great update on what is happening in the marketplace, and how they are approaching the COVID-19 crisis. David Fein, CEO of ValuSource, talks today about data, how it is compiled, its quality, and where it comes from. This is very useful information since we usually talk about variation multiples without knowing where all this information comes from.

Listings of the week:

– Sam Curcio (New York) is selling an Interior Design Architecture firm that also does repositioning work. Listed at $3.9 million. They did over $2.4 million in 2021 with an EBITDA of $1.1 million. It is an SBA prequalified deal.

– Bob Dunphy (New York) is selling a fabulous Mexican restaurant, SDE $350,000, and the asking price is $599,000.

Key takeaways:

[5:29] Darren Mize (GCF Valuations).

[6:21] Darren talks about what he is seeing in the business world these days.

[8:51] How important is the beginning of 2022 for Darren?

[11:18] How is Darren approaching the valuations?

[13:22] How does Darren’s valuation differ from business brokers’ valuations? What kind of adjustment does he usually have to make?

[16:41] Darren dives deep into the concept of data.

[19:43] How important is a location in trying to understand multiples?

[21:40] Darren shares advice to business owners who might think about selling and maximizing their value in the future.

[24:19] Deal of the week: Gary Goldwasser (Denver, Colorado) sold an electrical contractor company doing $5 million in revenue. The asking price was $1.75 million with real estate involved. The buyer purchased it through an SBA loan for $1.7 million.

[31:59] Listing of the week: Sam Curcio (New York) is selling an Interior Design Architecture firm that also does repositioning work. Listed at $3.9 million. They did over $2.4 million in 2021 with an EBITDA of $1.1 million. It is an SBA prequalified deal.

[33:36] David Fein (President and CEO of ValuSource)

[34:04] David talks about how buyers and sellers think about valuation.

[34:53] David shares what ValuSource does as the owner of the largest source of data for small businesses.

[36:23] What does the data collected by buyers and sellers tell us?

[40:01] David explains how to increase valuation by lowering risk.

[43:05] David shares how they acquire the data and from whom.

[46:26] David shares his advice for anyone wondering about the value of their business.

[49:23] Listing of the week: Bob Dunphy (New York) is selling a fabulous Mexican restaurant, SDE $350,000, and the asking price is $599,000.

Mentioned in this Episode:

Call us — 1-888-711-9018

Email us [email protected]

Call Gary Goldwasser at (303) 748-7420 or email [email protected]

Call Sam Curcio at (646) 470-9433 or email [email protected]

Call Bob Dunphy at (917) 589 0977 or email [email protected]

Tweetables:

“About valuation: We are determining performance on a month-to-month basis.” #thedealboard #transworldbusinessadvisors #valuation #business

“Not every business has gotten back to pre-COVID-19 performance.” #thedealboard #transworldbusinessadvisors #valuation #business

“When you exit a business you should give yourself enough time to prepare.” #thedealboard #transworldbusinessadvisors #valuation #business

“When you are selling your business, focus on the hard work that you have done and try to maximize that value.” #thedealboard #transworldbusinessadvisors #valuation #business

“Business owners tend to overestimate the value of their businesses.” #thedealboard #transworldbusinessadvisors #valuation #business

“Value is cash flow divided by risk.” #thedealboard #transworldbusinessadvisors #valuation #business

Mentioned in This Episode

• The Deal Board Podcast
• Subscribe to The Deal Board Podcast YouTube Channel
• Transworld Business Advisors
• United Franchise Group
• The Deal Board on Facebook
• The Deal Board on LinkedIn
• Learn More About Darren Mize of GCF Valuations
• Learn More About GCF Valuations
• Connect with David Fein on LinkedIn
• Learn More About ValuSource