文档介绍：Part VI – Contemporary Challenges in Entrepreneurship
Chapter 18 – Acquisition and Valuation of Business Ventures
Chapter 19 – Management ession and Continuity: A Family Business Perspective
Chapter 20 – Women and Minority Entrepreneurship
Chapter 21 – Total Quality Management: The Continuous Improvement Challenge for Entrepreneurs
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Chapter 18 – Acquisition and Valuation of Business Ventures
The Importance of Business Valuation
Buying or selling a business
Establishing an employee stock option plan (ESOP)
Raising growth capital through stock warrants
Determining inheritance tax liability
Attempting to buy out a partner
Going public
Acquisition of a Business Venture
Personal Preferences
Examination of Opportunities
Evaluation of the Selected Venture
Due Diligence
Due Diligence
plete “due diligence,” which means a thorough analysis of every facet of the existing business
Why is this business being sold?
What is the physical condition of the business?
How many key personnel will remain?
What is the degree petition?
What are the conditions of the lease?
Due Diligence
Do any liens against the business exist?
Will the owner sign a covenant not pete?
Are any special licenses required?
What are the future trends of the business?
How much capital is needed to buy?
Underlying Issues
Goals of the Buyer and Seller
Emotional Bias
Reasons for the Acquisition
Analyzing the Business
Many closely held ventures have the following ings:
Lack of management depth
Undercapitalization
Insufficient controls
Divergent goals
Establishing A Firm’s Value
Valuation Methods
Adjusted Tangible Book Value
Price/Earnings Ratio (Multiple of Earnings) Method
Discounted Earnings Method
The Leveraged Buyout: An Alternative for Small Ventures
This allows the entrepreneur to finance the transaction by borrowing on the pany’s assets. This method is the leveraged buyout (LBO).