Retailers - Your Smile Is The Best Business Asset !

2009-12-04T05:57:00.000-08:00

I think we can all agree that the 2009 year has been a downer for most businesses. But wow, we have recently completed valuations for several retail businesses, and what a joy it was to find businesses that produced high valuation multiples that for the most part were due to the owner's and their respective employees friendly and positive attitudes with customers.

I guess it's the old story "what goes around, comes around." So all you entrepreneural owners in retail, please take heed . . . . . . be friendly and helpful (not pushy) with your customers . . . . . and they will come back and back and back . . . . . and buy and buy and buy !! And that whole effort will produce purely magical results when it comes time to place a market value on your business or enterprise.

Paul A Halas, Jr., VA, CMC

Building Better Business Value

2009-10-14T13:28:00.000-07:00

Unexpected Business Valuation Results

Whenever a business valuation project is completed you can never really anticipate what is going to happen next.

An experience back in the 1980s comes to mind wherein I worked with a client in the deep south who had an ice manufacturing firm. This client contacted us because he had been approached by a firm up north who was "buying up" ice makers. In any event, this client had several plant locations, some 2500 retail ice cube outlets and was consistent, well established and profitable. We proceeded with our due diligence and this project topped out at about $2.8MIL and our client was pleased with our results. Then about three weeks later we received a panic call from this same client. He went on to say that this buyer from up north had been in for a visit, looked at his facilities and then made him an immediate offer of $4.2MIL and "what should he do now?" I quickly suggested only two words - "take it!"

The point here is valuation is always as much an art as it is a science. One of our industry profession "experts" has said publically that there can be a range of between 35 to 50% differential between valuation firms when valuing the same project. In the case noted above this buyer of ice companies may certainly have been interested in the significant number of buying influences represented by the seller's client base of some 2500 ice cube customers. And finally, the value of anything is always in the "eye" of the beholder, in this case the buyer. And of course, we have many cases where the final buy price was lower than the valuation price. Each case is different and obviously stands on its own.

Should any of our readers be interested in learning about key steps which can be taken that can produce significant increases in the value of their business, please contact us at hbvs@halas.com and/or visit our website at http://www.halas.com/.