1. Corporate finance

The bottom line

The two questions 'How much is your business worth?' and 'How can you make it more valuable?' are of paramount importance to any business owner.

This briefing summarises the main issues involved. It is aimed at anyone buying, selling or simply running a business, who needs to understand how businesses are valued.

The worth of a business hinges upon how much profit a purchaser can make from it, balanced by the risks involved. Past profitability and asset values are only the starting points. It is often intangible factors, such as key business relationships, which provide the most value.

The briefing outlines:

• The uses of valuation.
• Key factors affecting the value of your business.
• The standard methods of valuation.
• How to calculate profit for the purpose of valuation.

Going ahead

Buying a business can be a big step forward, or it can turn out to be disastrous. This briefing assumes that you have already found a suitable business (the 'target business').

It explains how to complete the purchase of the target business, including checking what state the business is really in.

The main pitfalls tend to be similar, regardless of how large the target business is.

The briefing covers:

• Approaching the target business.
• Completing due diligence.
• Negotiating the purchase.
• Settling the purchase once it is completed.

One chance only

Selling a business is often the culmination of years of work. It can be a difficult, emotional and time-consuming task.

It is not something that many managers or owners do more than once. You have to get it right first time.

The briefing outlines:

• The advice you will need.
• Grooming the business for sale.
• The sale process.
• Negotiation tips.

Think about it now

Many owner-managers put in a lifetime of hard work building their business only to throw away some of the rewards by failing to consider properly how they will exit from the business – both financially and as a manager.

It is vital to begin planning an exit at an early stage if it is to be a success. This briefing is aimed primarily at businesses run by a management team, but will also be useful to a sole trader with no employees. It covers:

• Setting your objectives.
• Getting into shape for an exit.
• The different exit routes available.
• Planning for trade sales, management buy-outs and family succession.