After the initial valuation is completed, hire a business opti-mization expert to help map out the next five years in order to achieve the returns forecasted in the valuation. 2. Year three of the valuation process Conduct a new valuation to take into account market fluctuations, asset variations and income changes, as well as competition, economic conditions and any internal company reconfiguring. After the follow-up valuation is performed, determine the best course of action needed to continue growing the value of the business. 3. Year five of the valuation process One year to six months prior to marketing the business for sale, complete a final valuation, using the data compiled in the three-point valuation process as a tool to support the ask-ing price. Oftentimes, the actual sale price of a business will be much higher than appraised value. The merit of the formal appraisal is that it sets a realistic threshold upon which to build during negotiations. Time And Money Well Spent Business owners may be apprehensive to take on the dual valuation/optimization approach due to the time and expense incurred. The outlay should be viewed as an investment rather than an expense, as it usually results in a higher sale price — with the added incentive of reduced deal fatigue for both the seller and buyer. We see both sides of the coin at Pursant and, through our experiences with numerous types of clients — seek to ensure that the sale of your business is as profitable as possible. We have witnessed 20-plus-year-old businesses that have not properly prepared for a walkaway sale with barely enough money to pay off their outstanding debts and taxes. These sellers are often beholden to the new owner for a salary or have to seek employment outside of their traditional market segment or sector due to the restrictions of a non-compete agreement. On the other hand, the companies we see that invest in valu-ation and optimization typically have very different outcomes. The owners of these companies frequently walk away from their businesses with more money at closing and an increased peace of mind, comforted by the notion that they can seamlessly transition to retirement. CM Trisch Garthoeffner, vice president of Pursant LLC’s mergers and acquisi-tions (M&A) division, has more than 10 years of experience managing transactions ranging in size from $2 million to $300 million. Pursant takes on initiatives in business acquisition or divestiture, strategic advi-sory and executive search — strategic challenges for which firms may not have the time, manpower or competencies but which, when executed mindfully, can meaningfully impact the trajectory of a business. Pursant specializes in the facility services sector. Garthoeffner can be reached at (847) 229-7000. To learn more about the valuation services available to you, please visit www.Pursant.com. Product Information no. 220 on page 24 www.cmmonline.com 43
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