Building equity value
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The document discusses strategies for building business value, emphasizing the importance of timing and understanding valuation equations, such as profit multiplied by a multiple. It highlights the need for business owners to have an exit plan and to develop necessary skills for maximizing future sale value. The presentation includes examples of profit growth and asset growth valuation models.
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Building equity value
- 1. The Business Journey – “Building The Value in Your Business” Jim Henderson Partner Shirlaws (UK) Ltd 29 Club, Glasgow Tuesday, 26th August 2014
- 2. Building Value in Your Business • Why ? • Why now ? • What are the benefits ? • How to build value ?
- 3. Why Now ? - Timing
- 4. Why Now ? - Baby Boomer Cycle
- 5. Economic Cycle: Some Dates
- 6. V = P x M Valuation Equation
- 7. V = P x M Valuation = Profit x Multiple Valuation Equation
- 8. Profit Growth Valuation = Profit x Multiple e.g. 24 = 4 x 6
- 9. Profit Growth Valuation = Profit x Multiple e.g. 24 = 4 x 6 36 = 6 x 6 (grow income)
- 10. Asset Growth Valuation = Profit x Multiple 24 = 4 x 6 36 = 6 x 6 (grow income) Or 36 = 4 x 9 (build the multiple) Or 54 = 6 x 9 (both)
- 11. Valuation Model - Assets
- 12. Above and Below The Line
- 13. Valuation Model
- 14. Summary • What is your Multiple really? • Have an Exit Plan – exit on full value • Build in the skills now for sale tomorrow • V = P x M above the line and below the line • Key skills required in a step fashion
- 15. Future Seminars