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BC Blog

Businesses are dynamic and markets are constantly changing. We know that for business owners and managers, time is at a premium. That’s why the Pantheon BC team will offer its ongoing advice and analysis here on a variety of business issues. Is there a specific topic you’d like addressed? Let us know here.

 

With Christmas once again upon us, it seems appropriate to take a little time for reflection this holiday season.  For most businesses, Christmas means selling as much merchandise as humanly possible, closing out the year, managing tax strategy, and over-indulging at holiday parties.  But as business owners, Christmas should mean more than that.

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I see a lot of owners who over-estimate the value of their business to outside buyers or investors because they fail to realize that at the most basic level, the value of any business is derived from its ability to consistently produce earnings (operating cash flow) over time.

Like people, businesses change over time and so different methods can be used to measure value depending on the situation. Often times multiple methods are used together to help provide a more realistic and reliable estimate of a firm's value.  Some methods focus on the past, others focus on the future, but they all seek to answer the same question, "What is it worth TODAY?"

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Owners who understand the basic factors that contribute to the value of their business, are better equipped to manage their firms in a way that maximizes value over time. Here are just a few critical factors that can impact how much your business is worth...

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A few months ago my wife and I had the opportunity to visit Costa Rica, a truly amazing experience, but also a valuable lesson in how adhering to the basic fundamentals of business can benefit all of us.  Almost every business we frequented during our trip was so focused on us, and making sure we had a good experience, that we inevitably had a 7-day collection of good experiences.

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We've all heard the saying, "Nothing is certain but death and taxes."  While this may be true in life, it does not have to be true in business. Having an intelligent, well-planned tax strategy can save you money, eliminate large fluctuations in cash flow, help you manage your capital reserves, and make it easier for you to access capital to grow your business.

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