Building Your Company’s Value

Scott Wait, CPA, AEPRich Wait, CPA, CVA, AEP

Welcome

Essence of Business Value

Top Business Value Drivers

Top Business Risks to Value

Identify Your Business Life Cycle

Have you heard the Expression…

TUIT

The Essence of Value

Multiples… Are a Shorthand Convention:

X represents earnings:

i.e. 3X;4X; 5X;

6X, etc…

Drivers of Value

• Brand (Do you have a brand or a private label?) • Channel metrics • Innovation (Are you an innovator? Apple)• Product “tweaking”• Customer loyalty • Your business sector’s growth rate

Drivers of Value

QUALITY OFMANAGEMENTTEAM

Drivers of Value

QUALITY OFEARNINGS

Drivers of Value

EXISTING CLIENT CONTRACTS & RELATIONS

Drivers of Value

STRENGTH OF EXISTING SUPPLIER RELATIONSHIPS

Top Business Risks to Value

Common elements of Business Risk

• Inexperienced Management Team• Lack of Management Depth• High employee turnover (Key employees not locked

into a contract – retention by bonus)• Contingent Liabilities• Lack of Customer Diversification• Poorly Maintained Assets• High Operating Costs• Frequent Contract Renewals (bidding)• High Financing Cost• Employee Fraud• Cyber Fraud

Know Your Business / Industry Lifecycle

Business UnitLife Cycle Matrix

Advisors at Critical Points in Business

Financial management and strategic advisors are important resources to achieve your business and personal goals.

Successful companies are transparent with their

relationships and rely on professional advisors and consultants to support them, especially at critical points.

Scott Wait, CPA, AEP Rich Wait, CPA,CVA, AEP scott@rswait.com rich@rswait.com 775.825.7337

Contact Information