This is why you may not keep your Client when they Sell

keep

Recent collateral damage that happened when I helped a client got me thinking. Will you keep your client when they sell? Watch this and let me know. Secure link here or YouTube here:

Thanks,
Josh

Sign up for this blog here and connect with me on LinkedInFacebookTwitter, and YouTube.

Can I Help You?
Hi, I’m Josh Horn, CPA/ABV, CVA of Horn Valuation. I help with business valuations in friendly or unfriendly situations. I also help owners build valuable companies. My clients are business owners and attorneys. If you’d like more information, check out my website hornvaluation.com, email me at josh@horncpa.com, or call me at 217-649-8794.

Josh Horn CPA

I’m a licensed Certified Public Accountant (CPA) and double-credentialed in business valuation (CVA & ABV). I’ve been a tax and business consultant in a top 100 CPA firm and a controller in a large international company. I’ve also valued and been the primary advisor to multi-million dollar and small companies in various industries.

“If you’re not working on business value, who is?” Josh Horn, CPA, Certified Valuation Analyst and Accredited in Business Valuation

You Must Understand Accounting to Value a Business

accounting

There are few absolutes in business valuation. This is one of them. You must understand accounting to value a private business correctly. Why?

Recognize Issues
Issues in the accounting records can have a huge impact on value. If issues aren’t identified, the whole foundation starts to wobble. Knowing what to ask and how to ask it are keys to finding issues. Here are two real stories:

Me: “What about this truck on the depreciation schedule?”
Client: “Oh, that’s a personal truck (insert name) bought. I won’t be buying personal vehicles through the business.” 

That was a $20,000 change to my capital expenditures estimate. 

Me: “Can I see the Accounts Receivable aging schedule?”
Client: “Here’s our over 90 days past due list.”

It was over $40,000. A hit to book value and possibly future cash flows. Once you find issues, you must…

Handle Issues Correctly
Knowing where to look and finding it won’t get you home. You must know how to handle it using accounting. That inventory balance needs to go up. Every entry needs a debit and a credit. Where do you book the other side? Cost of goods sold or accounts payable? It depends. So, you dig a little further. You find the answer and make the adjustment. Maybe that changes the value $10,000…or maybe $100,000? Maybe not at all. 

The Bottom Line
I rarely get a perfect set of accounting records. Even when I’m lucky enough to get CPA-prepared financials, it doesn’t guarantee there won’t be issues. Sometimes it’s as simple as reclassifying money from one account to another. Other times, I have to turn everything inside out. If you’re valuing a business, I hope you’ll learn the language of accounting or find someone who knows it. Otherwise, you could miss something big. I’m here if you need me.  

Thanks,
Josh

Sign up for this blog here and connect with me on LinkedInFacebookTwitter, and YouTube.

Can I Help You?
Hi, I’m Josh Horn, CPA/ABV, CVA of Horn Valuation. I help with business valuations in friendly or unfriendly situations. I also help owners build valuable companies. My clients are business owners and attorneys. If you’d like more information, check out my website hornvaluation.com, email me at josh@horncpa.com, or call me at 217-649-8794.

Josh Horn CPA

I’m a licensed Certified Public Accountant (CPA) and double-credentialed in business valuation (CVA & ABV). I’ve been a tax and business consultant in a top 100 CPA firm and a controller in a large international company. I’ve also valued and been the primary advisor to multi-million dollar and small companies in various industries.

“If you’re not working on business value, who is?” Josh Horn, CPA, Certified Valuation Analyst and Accredited in Business Valuation

Imagine Value as a Journey instead of a Destination

imagine

Imagine if everyone woke up tomorrow and decided value was something to be achieved over time instead of ordered like fast food. What would this mean?

Better relationships with co-owners and employees
We’d recognize that our failure to empathize with others is holding us back. Without empathy, we’ll never get the cooperation we must have. With everyone rowing in the same direction, there’s no limit to what can be achieved. And this would mean…

Better documentation of processes
Once our hearts and minds are opened to the pain of others, we would be sure to document core processes. We wouldn’t do it to put it on the shelf. We’d do it intentionally and adjust it along the way, cross-training others to help. And this would mean…

No “single point of failure”
Nearly every private business in America is one lost person away from oblivion. It’s our nature to procrastinate. “That only happens to those types of businesses” we say. And then it happens to us when we’re least ready. We’d start to become keenly aware this means…

People are the most important asset
We’d stop looking for the latest marketing or tax gimmick and realize no one “shiny object” will save our business let alone drive its value to unimaginable heights. We’ve all seen what one good person can do for our business. We’ve also seen what one bad person can do too. And this would mean…

Culture above everything
Culture is the hardest thing to change in a business. It’s also the most powerful force a business has when it’s working. It’s like a secret weapon. We know what good culture looks like. Southwest Airlines. Disney. What about yours? Does it make you burst with pride or cringe? You can change it starting now. It will take time. The first step is to decide what you want your culture to look like and being unwavering in your resolve to get there. 

Value is a journey not a destination. Are you ready to start the trip? 

Thanks,
Josh

Sign up for this blog here and connect with me on LinkedInFacebookTwitter, and YouTube.

Can I Help You?
Hi, I’m Josh Horn, CPA/ABV, CVA of Horn Valuation. I help with business valuations in friendly or unfriendly situations. I also help owners build valuable companies. My clients are business owners and attorneys. If you’d like more information, check out my website hornvaluation.com, email me at josh@horncpa.com, or call me at 217-649-8794.

Josh Horn CPA

I’m a licensed Certified Public Accountant (CPA) and double-credentialed in business valuation (CVA & ABV). I’ve been a tax and business consultant in a top 100 CPA firm and a controller in a large international company. I’ve also valued and been the primary advisor to multi-million dollar and small companies in various industries.

“If you’re not working on business value, who is?” Josh Horn, CPA, Certified Valuation Analyst and Accredited in Business Valuation

Why Control of a Business May Not Add Value

control

Does control of a business always add a value premium? Maybe not. Find out why here…or YouTube here:

Thanks,
Josh

Sign up for this blog here and connect with me on LinkedInFacebookTwitter, and YouTube.

Can I Help You?
Hi, I’m Josh Horn, CPA/ABV, CVA of Horn Valuation. I help with business valuations in friendly or unfriendly situations. I also help owners build valuable companies. My clients are business owners and attorneys. If you’d like more information, check out my website hornvaluation.com, email me at josh@horncpa.com, or call me at 217-649-8794.

Josh Horn CPA

I’m a licensed Certified Public Accountant (CPA) and double-credentialed in business valuation (CVA & ABV). I’ve been a tax and business consultant in a top 100 CPA firm and a controller in a large international company. I’ve also valued and been the primary advisor to multi-million dollar and small companies in various industries.

“If you’re not working on business value, who is?” Josh Horn, CPA, Certified Valuation Analyst and Accredited in Business Valuation

What if Your Business Has Little or No Value?

little

What if your business has little or no value? Fix it here…or YouTube here:

Thanks,
Josh

Sign up for this blog here and connect with me on LinkedInFacebookTwitter, and YouTube.

Can I Help You?
Hi, I’m Josh Horn, CPA/ABV, CVA of Horn Valuation. I help with business valuations in friendly or unfriendly situations. I also help owners build valuable companies. My clients are business owners and attorneys. If you’d like more information, check out my website hornvaluation.com, email me at josh@horncpa.com, or call me at 217-649-8794.

Josh Horn CPA

I’m a licensed Certified Public Accountant (CPA) and double-credentialed in business valuation (CVA & ABV). I’ve been a tax and business consultant in a top 100 CPA firm and a controller in a large international company. I’ve also valued and been the primary advisor to multi-million dollar and small companies in various industries.

“If you’re not working on business value, who is?” Josh Horn, CPA, Certified Valuation Analyst and Accredited in Business Valuation