The good news is there is no “correct” way of valuing the shares. The bad news is there is no “correct” way of valuing the shares! In my experience it’s just a case of taking an intelligent position and then fully justify that position by explaining the method you’ve used and systematically showing why/how you’ve ruled out any other potential methods.  There is a growing realisation amongst valuers that there is no such thing as a “financial control premium”. The only benefit of control is the hypothetical (and able to be substantiated) forecast improvement to the shareholder’s position if they Read more

I get a lot of questions about how much a business valuation costs, how long it takes and what kind of report you get at the end. So I created this video to explain exactly how it works. You can watch the short video here Read more

There are only 3 real reasons why your business could fail. With so few reasons, why are liquidators doing so well at the moment? As an accountant and business consultant I’m right at the coal-face so I thought I’d share my recent observations so that you can assess your own business objectively against the criteria and avoid any unnecessary pain. I often have entrepreneurs coming to me with exciting new ideas. But it’s my job to take the emotion out and look at the model objectively. It’s not enough to be innovative and to identify an unsatisfied need in the Read more

I was asked this question today and this was my answer: I run a chartered accountant firm and I see a lot of different types of people and different types of business models. I can tell you as a fact that if you are creating a business around selling a product or service that the consumer can get somewhere else, you are doomed to under-achieve and probably fail. Consumers are too savvy these days and can check prices with your competitors too easily. A discounting spiral begins and doesn’t stop until most of the players close down. The big caveat here Read more

I’ve created this video to show you how easily you can get an indicative value for any business using our Free Online Business Valuation Calculator. Watch the video, then use the calculator at the free business valuation calculator .Read on to see the business valuation methods used by Climax Business Strategies Chartered Accountants. Read below if you want to know how the calculator works, but don’t worry, we do all of the hard work for you and explain our methods in the free 7 page business valuation report emailed to you at the end of the calculator. The valuation method The Read more

What are Reportable Employer Superannuation Contributions for Payment Summaries? Whether you’re an employer or an employee you need to read this. In 2010 the Australian Taxation Office added a new label to the annual payment summaries (group certificates) for Reportable Employer Superannuation Contributions. The ATO has since broadcast a number of warnings stating that many employers have made errors in reporting this label. The consequences for getting it wrong can be significant for both employers and employees so it’s important for everyone to understand how the reportable amount is calculated, otherwise you could end up paying too much tax. Reportable Employer Superannuation Contributions are Read more

It concerns me a great deal that the majority of SME’s that I meet have never used a budget for their business. A simple revenue target is not a budget and neither is “last year’s expenses plus 10%”. There are a few excuses that I’m often given that on the face of it seem valid, but when you think about it a bit longer they are dangerous assumptions. Here are a few of the common excuses, make up your own mind and tell me what you think: 1) It’s impossible to predict the future, I need concentrate on living in Read more

I’ve made a profit but where’s the cash? This is a common question that I get asked regularly from business owners across all industries. Luckily the answer is really easy if you know what you’re looking for. But sadly I often get asked this question after the business owner’s existing accountant has failed to give them a straight answer and it’s almost too late. The truth is you don’t need to be an accountant to work it out anyway, so power to the people I say. The secret is that most of the things that really affect your cash flow are not Read more

How to value your own business in 15 minutes Every business owner should have a good idea of what their business is currently worth even if they don’t intend on selling the business soon or at all. In the words of the current leader of the opposition in Australia “S**t happens”. How true this is, especially in business. You would need to know what your business is worth in the following non-exhaustive list of circumstances. How many reasons do you have to find out what your business is worth? Buying a business or division externally or internally Selling a business Read more