E254: Unlock the Secrets Behind Business Valuations: What Every Owner Needs to Know Before Selling

How2Exit: Buy, Don't Build - M&A of Small Businesses

Watch Here: https://youtu.be/otQ8R7xNfNg
About the Guest(s):
Gregory Caruso is a seasoned business valuator with over 40 years of experience. Holding both a JD and CPA, Gregory is licensed in the state of Maryland. His extensive background includes 10 years in a family home building operation and significant experience in business brokerage and valuation. Author of "The Art of Business Valuation," Gregory has contributed to continued education through his role as editor in chief and host of a monthly webinar for the National Association of Certified Valuators and Analysts (NACVA). His expertise spans a wide array of valuation contexts, including ESOPs, estate planning, and exit strategies for small to medium-sized businesses.
Summary:
In this How2Exit episode, host Ronald Skelton interviews valuation expert Gregory Caruso on the complexities of valuing companies. Gregory shares insights from his diverse experience, discussing key valuation methodologies, industry standards on price vs. value, and unique requirements for ESOPs, estate planning, and more. He covers profitability, risk, and management structure, offering a comprehensive look at the valuation landscape for business owners planning an exit.
Key Takeaways:

• Understanding Valuation Models: Business valuations typically involve a handful of established models, although variations exist to suit specific purposes like ESOP or SBA requirements.
• Importance of Management and Profitability: Enhancing profitability and preparing the management team can significantly impact a business's valuation.
• Role of Judgment in Valuation: Beyond mathematical calculations, Timothy emphasizes the role of professional judgment in assessing business value.
• Impact of Purpose on Valuation: The intended use of a valuation—whether for market sale, ESOP, or estate planning—alters the methodology and considerations.
• Strategic Insights into ESOPs: ESOPs are valued at fair market value without synergies, making them ideal for industries with lower synergy potentials.

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Contact Greg on
Linkedin: https://www.linkedin.com/in/gregorycaruso/
Website: http://www.artofbv.com/
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How2Exit Joins IT ExchangeNet's Channel Partner Network!
-Why IT ExchangeNet?
Since 1998, IT ExchangeNet has created $5 billion in value by selling more than 225 IT businesses in 20 countries. IT ExchangeNet works exclusively with IT-enabled businesses generating between $5M and $30M who are ready to be sold, and M&A decision-makers who are ready to buy. For over 25 years IT ExchangeNet has developed industry knowledge that helps them determine whether a seller is a good fit for their buyers before making a match.
"Out of all of the brokers I've met, this team has the most experience and I believe the best ability to get IT service businesses sold at the best price" - Ron Skelton
The IT ExchangeNet M&A Marketplace we partnered with has a proprietary database of 50,000+ global buyers seeking IT Services firms, MSPs, MSSPs, Software-as-a-Service platforms, and channel partners in the Microsoft, Oracle, ServiceNow, and Salesforce space.
If you are interested in learning more about the process and current market valuations, complete the contact form and we’ll respond within one business day. Everything is kept confidential.
Are you interested in what your business may be worth? Unlock the value of your IT Services firm, visit https://www.itexchangenet.com/marketplace-how2exit and complete the contact form.
Our partnership with IT ExchangeNet focuses on deals above $5M in value.
If you are looking to buy or sell a tech business below the $5M mark, we recommend Flippa.
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