Blog 4: Evolving Capital Structures in Family Businesses: Why Professional Valuation is Essential Introduction Family businesses often encounter scenarios that require changes in their capital structure, whether due to expansion, new investments, or accommodating family members’ evolving needs. Such changes are not only financial decisions but also strategic moves that can shape the future of […]
Blog 3: Untangling Mixed Cash Flows: Valuing Real Estate and Operating Businesses Separately Introduction Family businesses often mix real estate assets with operating businesses, creating a challenge in understanding their true value. For example, a trucking company might own the terminal property it operates from, combining predictable rental income with volatile operating cash flows. Another […]
A Comprehensive Guide to Understanding Business Valuation and Preparing for a Successful Exit Introduction: Why Selling a Business is More Complex Than It Seems For many private business owners, selling their business is a once-in-a-lifetime event. Unlike publicly traded companies, where valuation and sale processes are standardized, selling a private business involves subjective judgment, negotiation, […]
Blog 2: Balancing Family Dynamics: Structuring Businesses to Meet Individual Goals Introduction Family businesses often face a unique challenge: balancing the diverse goals and interests of family members. One child may have a passion for running the business, another may prefer financial returns without involvement, and yet another may seek liquidity to pursue independent goals. […]
Blog 1: The Need for Professional Valuation in Succession Planning: Navigating the Complexities of Family-Owned Businesses Introduction Family-owned businesses are the backbone of many economies, and Canada is no exception. Yet, despite their contributions, a staggering statistic looms over these enterprises: Approximately 70% of family-owned businesses fail to survive the transition from the founder to […]
Introduction In Part 1 of this series, we discussed the allure and pitfalls of relying on EBITDA multiples to value a business. While EBITDA multiples can provide a quick snapshot, they often oversimplify the nuances of business valuation. In this follow-up, we’ll delve deeper into the key factors that can distort the meaning of EBITDA […]
Introduction In the world of business valuations, EBITDA multiples are often thrown around as a quick and easy way to estimate a company’s worth. On the surface, this approach seems convenient—it provides a straightforward formula that combines industry averages and your business’s financials. But here’s the truth: relying solely on EBITDA multiples can misrepresent your […]
Overview of Sections 85 to 88: These sections of the Canadian Income Tax Act allow taxpayers to defer the recognition of gains when transferring assets to a corporation or reorganizing their business, ensuring that taxes are not triggered immediately. However, a proper valuation is essential to comply with legal and tax requirements. Why Business Valuation […]
The Significance of the Date of Separation in Business Valuation In business valuation, the valuation is always on a particular date known as valuation Date. Only the market conditions and the state of business on that date is considered in valuation. Hindsight is not allowed. Wealth Division Framework: The date of separation marks the end […]
Introduction When we think about valuations, public companies often come to mind, with their stock prices flashing on financial tickers worldwide. But what about private businesses? While private companies aren’t required to publish their valuations, obtaining a professional valuation can unlock powerful insights and serve as a strategic compass for business growth. This blog will […]
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