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Financially Simple Bizcast


The Financially Simple podcast is your one-stop resource for small business owners. Gain unique insights into growing, refining, and selling businesses. You will hear ways business owners have reduced their tax liabilities, increased their income, improved office morale, saved for the retirement of their dreams, and more.
Host Justin Goodbread is a serial entrepreneur, award-winning CFP® (Certified Financial Planning professional), CEPA® (Certified Exit Planning Advisor), and CVGA® (Certified Value Growth Advisor) with years of experience guiding business owners from start to exit in their business.

Jun 21, 2018

In episode #66 of Financially Simple's podcast, Justin examines how the value and profitability of a business are related by separate concepts.

A business can be profitable in the market. But when it comes to its value when the owner wants to sell that business, it can turn out to be worth less than what the owner expected. Justin compares a business's value to its profitability and considers the various factors that influence each of these aspects.

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BLOG TRANSCRIPTION: Value vs Profitability Blog post

 

TIME INDEX:

00:33 - Value and Profitability are two separate things

03:38 - U.S. Market Segments

06:42 - Actual Business Sales

10:58 - 5x EBITDA?

13:15 - Size Matters

15:03 - Multiples Matter

16:55 - A Tale of Two Companies

20:16 - Focusing on Quality rather than Quantity

20:55 - Conclusion

 

USEFUL LINKS:

Financially Simple

Private Market Project, pepperdine.edu

How EBITDA can Mislead, Harvard Business Review

Business Valuation Multiples, summitacquisitions.com

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Financially Simple podcasts are recorded on:

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Yeti Blue Microphone: https://amzn.to/2VB6V7x

DISCLAIMER:

Neither Financially Simple, LLC nor its affiliates offer tax or legal advice. Interested parties are strongly encouraged to seek advice from qualified tax and/or legal experts regarding the best options for your particular circumstances. Justin Goodbread, CEO of Heritage Investors, LLC, a Registered Investment Advisor, is an Investment Advisor Representative who offers advisory services through Heritage Investors. The information contained within the podcast is for informational purposes only and not considered investment advice. Seek help from a competent Financial Advisor.