Check Out Joe's Weekly Program

"Get to know local businesses and non-profits every Friday morning at 8 a.m. with Joe Vagnone and Wayne Bidelman."





Jeff Tarte:
Senator NC Senate District 41

"Joe served as an integral part of my Small Business Advisory Board during my tenure as Mayor for the Town of Cornelius from 2007 to 2012.  He has the ability to bridge and create collaboration between small businesses and government agencies.  He was instrumental in guiding us to creating town policy to grow small businesses in the local area."
Jeff@jefftarte.com

The Importance of Valuations

 

There are many different Valuation methods. Depending on the size of the small business it can be a mix of art, science & experience as well as a real knowledge of the market the business operates in. I use my expertise to help you choose the right method that fits your business.

 

 

Traditional Methods Used to Value Your Business

 

• Asset Based Evaluations
Furniture, fixtures, equipment and inventory have very little to do with the value of the business, but it shows the Buyer real value which should help them create “cash flow.”


• Multiple of Cash Flow Method
The real cash flow, or adjusted cash flow, is calculated starting with the profit and loss statement; adding back any expenses you would get some benefit from, if you were the Owner.
- Travel, meals and entertainment
- 401K, IRA

- Car Payments

- Health Insurance, life insurance, spouse’s and children’s as well.

• Multiple of Sales Method
Difference in payroll, rent, location and competition need to be accounted for in the sale price.

 

• Return on Investment

Three returns to look at and compare with other investment opportunities available are:
- Money/Time/Risk

 

• Rule of Thumb Method

Gathering of data on a particular industry, giving you general information on sales, expenses and costs involved with valuing the business.

 

• Replacement Cost
Ask yourself, “If I had to start from scratch, how much would it cost to duplicate this exact business?”

- Rule: If the business has been operating successfully in the same location for more than 5 years, chances are you will spend a lot more cash attempting to duplicate that business.


Joe Vagnone's New Book!

"Its apparent to the reader that the process of buying a business is what helps prepare the buyer for the owning & operating of their business."

To find out more, click here