By: Wesley Legg Many business owners would consider a company with a revenue growth rate of 40% exceptionally attractive. “Surely this is a well-founded business primed for a promising future. With a growth rate of 40%, this company will soon be a dominate player in their market.” But they’ve forgotten a key part of that…
By: Zane Tarence There is much to consider when deciding to pursue a merger or acquisition. Anyone contemplating a transaction should be consulting with, and ultimately engaging with an M&A advisor. When choosing an M&A advisor there are at least five things to consider: Trust This is the foundation of relationships, and the relationship with…
By: Duane Donner This article was originally published on Fellowship of Companies for Christ International’s blog. It is, unfortunately, a common story: After a lifetime of building a successful business, a man or woman sells what they created and retires to live “the good life.” Pretty soon, they realize there is really nothing that wonderful…
The Net Present Value calculation indicates a business is worth its “risk adjusted future cash flows.” The future portion of that statement indicates that buyers are willing to pay more for something they anticipate growing. This is practically seen by two of the most common approaches to business valuations using cash flow projections: DCF and…
By: Wesley Legg Definition: A company’s total addressable market is the total annual revenue opportunity available for a given product or service. Example: Suppose a company sells exterior residential doors. The total addressable market is the total value of doors sold each year. This could consist of both door replacements and new housing starts. We…
By: Wesley Legg Many companies tout their differentiation and innovation, yet the clearest way to determine if this actually exists is by evaluating a business’ relative margins. Having higher margins than the industry average usually denotes a competitive advantage, like having low cost advantage or having pricing power because of a brand. Having above average…