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What Should I Consider When Buying a Company?

Category: Business Planning

What Should I Consider When Buying a Company?

Projecting Your Business Cash Flow

Introduction

You’re considering whether buying and owning a business is right for you. You may know what your objectives are, what you’re willing to pay and what your income requirements are. But do you know that businesses in the same industry, of the same age, same size and same profitability can have major variations in valuation among them?

This is not to say that one company is overvalued and another isn’t. It is to say that seemingly similar companies may be very different in ways that both affect their value and how they fit with your objectives.

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3 Reasons You Need A CFO

CFO

Imagine you are the owner of a company with $5 million in sales. It has been operating for a number of years, and is profitable, but you want to grow the business.

Say you would like to double sales over the next five years. Before you start the growth process, you should ask yourself: why double sales? What will a doubling in sales mean to profits? What cash is needed to double sales?  Quite often, you know that you are profitable but are not satisfied with the level of profits and you do not know exactly why profits are where they are or what should be done to increase them.

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Posted in Business Planning

5 Internal Controls Needed To Grow Your Business

5-Internal-Controls

Internal controls are needed to

1) Protect the cash and other assets of a business,
2) Maintain the integrity of the financial information used to make business decisions and assist in fraud detection; and
3) Maintain compliance with laws and regulations, especially those where being offside can cause major risk to your company.
In small business, the owner can control every single transaction, and this is a very good control mechanism. However, it severely limits the size a company can get.

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Posted in Business Planning

5 Numbers You Need To Run Your Business

5-numbers-you-need-to-run-your-business

How can you outsmart your competition and grow your company?

Let’s say you are the owner of a small company. It is profitable, because bills are paid and money is in the bank. However, the company is not growing or becoming more profitable.

Many companies devise corporate strategies to achieve these goals and some include very specific interim goals. But a great number of strategies are poorly executed and goals are not achieved.

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Posted in Business Planning