Intentional Growth

Intentional Growth™ is a podcast for entrepreneurs and business owners wanting to clarify a path to ... more

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August 04, 2022 01:12:48
#312: [Owner Success Stories]: Demystifying Business Valuations by Comparing Two Offers with Chris Yates

#312: [Owner Success Stories]: Demystifying Business Valuations by Comparing Two Offers with Chris Yates

Ep. #4 [THEME THREE]   In this last episode of the series, “Demystifying Business Valuations,” we have Chris Yates, the owner of Rhodium Weekend, a community of online entrepreneurs, on the show to share the story of how he sold his business, Centurica. Chris received two offers from different buyers that were wildly different. In this episode, we hammer home the concept of intrinsic financial value vs. strategic transaction value by unpacking the differences in Chris’s offers.    In the first half of this episode, Chris goes in-depth with the first offer he got from a strategic buyer–an Amazon aggregator–that wanted to do an “acquihire” (essentially wanting to purchase the company for the people and processes). Chris describes how the purpose of the deal drove the deal structure and terms and how it eventually blew the deal up.   In the second half, Chris walks us through how he doubled down and focused on the intrinsic financial value of the company by getting a bank to pre-approve an SBA loan (ultimately determining the intrinsic financial value of the company based on the risk of the cash flow).    Getting clear on the intrinsic financial valuation helped Chris during the second negotiation for a few reasons. First, he knew what his valuation was regardless of the specific buyer. Second, Chris was able to clearly negotiate the terms and deal structure efficiently because he knew what the company’s intrinsic value was worth. In addition, there are limitations to “creative” deal structures when an SBA is used.    Being approached by a buyer can cause a rush of emotions for you as the business owner. However, in this series, we have consistently discussed ...

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July 28, 2022 01:16:44
#311: Strategic Transaction Value - The Value of a Business Based on the Buyer's Purpose of the Deal

#311: Strategic Transaction Value - The Value of a Business Based on the Buyer's Purpose of the Deal

Ep. #3 [THEME THREE]   So far in this series, we’ve been demystifying business valuations by focusing on how a company is valued–as it stands today based on the risk of its cash flow–so you can view and run your company like a financial asset. By focusing on growing the intrinsic financial value–and how the net proceeds correlate to your timeline and ability to hit your financial targets–you will have choices in the future.   With that context in mind, we’re now going to dive into what you can do to maximize your valuation and net proceeds if you want to sell your company to a third party (e.g., strategic buyer or private equity firm). Today’s show focuses on the strategic transaction value which is driven by the reasons buyers buy a company or as we call it “the purpose of the deal…”   What happens if the current company financials are not the primary reason behind the buyer’s purpose of the deal?    Every entrepreneur and business owner can tell one heck of a story–about the history and future potential of the company. And when it comes to a strategic buyer, we’ve barely ever met an owner who doesn’t know why a strategic buyer would buy their company and what they should do with it. Too often, during the sale to a third party, this story is left to “finance people” to show the numbers and explain the story.    On today’s show we have Ted Schlueter and Eric Coonrod who have partnered up to solve this issue. They help companies maximize value to a third party buyer through ...

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July 21, 2022 00:58:39
#310: Intrinsic Financial Value–The Value of a Business Based on the Risk of Its Cash Flow with David Diehl

#310: Intrinsic Financial Value–The Value of a Business Based on the Risk of Its Cash Flow with David Diehl

 Ep. #2 [THEME THREE]   If you focus on growing the intrinsic financial value of your company (the value based on the risk of the cash flow), you can engineer the future valuation you want as long as you have enough time and capital–all while focusing on the right strategies that de-risk the company’s cash flow (therefore increasing the multiple) while increasing your normalized EBITDA. A lot of business owners don’t understand how intrinsic financial value works, but we haven’t done a deep dive on it yet. Until now.   Dave Diehl is back on the show. He is the CEO of Prairie Capital, a nationwide investment banking firm that specializes in helping business owners transition via ESOPs, management buyouts, and third party buyers.    In this interview, Dave talks about the different types of risk within a company–from the financial buyer's view–and how an entrepreneur can lower that risk and, therefore, increase the valuation. He is the perfect guest for this topic because Prairie does 425+ ESOP valuation updates each year and works on countless transactions that are valued and structured based on the intrinsic valuation of the company.    This episode is quite literally a treasure trail to help see your company's valuation through the eyes of a financial investor and understand how to increase the equity value over the course of a couple of years.   //WATCH THE INTERVIEW ON YOUTUBE: Intentional Growth™ Podcast   What You Will Learn How a financial buyer perceives risk in a company. Dave’s thoughts on the discounted cash flow (DCF) approach vs. the market approach to a valuation. ...

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July 14, 2022 01:01:52
#309: Demystifying Business Valuations: Methods to Value a Business, Normalized EBITDA, and Multiples

#309: Demystifying Business Valuations: Methods to Value a Business, Normalized EBITDA, and Multiples

Ep. #1 [THEME THREE]   There are so many terms, philosophies, and methods regarding business valuations that many owners tend to ignore, or they delay addressing their company’s valuation until they want to sell, which is often too late.    In the previous theme, we covered how you can measure and monitor the value of a business–by integrating it into your company’s financials–while you own it. In order to do this, we need to understand how a company is valued and the key concepts and levers that influence that value.    Arkona co-founders Ryan Tansom and Pat Hobby are back to kick off the next theme:  Demystifying Business Valuations. They explain the difference between intrinsic financial value and strategic transaction value and how they relate to normalized EBITDA, multiples, enterprise value, equity value, and finally how much money is going into your pocket after a sale (net proceeds). During this episode, Ryan and Pat unpack how companies are valued so you can begin to see–and run–your business like a financial asset.   //WATCH THE INTERVIEW ON YOUTUBE: Intentional Growth™ Podcast   What You Will Learn Why knowing the value of your company today is crucial to view–and run–your company as a financial asset. That intrinsic financial value +/- the purpose of the deal = strategic transaction value. Why the intrinsic value of a business is based on its cash flows. Why planning into the future using the intrinsic value of the company increases the options you will have when you actually want to sell. How to get a ...

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July 07, 2022 01:45:05
#308: Quarterly Economic and M&A Market Update with ITR Economics, GF Data, and ButcherJoseph

#308: Quarterly Economic and M&A Market Update with ITR Economics, GF Data, and ButcherJoseph

QUARTERLY ECONOMIC AND M&A MARKET UPDATE   There’s a lot going on in the world today that could make a business owner feel anxious and question what to do next with their company. Should you sell your business? Acquire other companies? Reinvest? Play the long game and grow intrinsic value? What about the labor market, geopolitics, and supply chains, and their impact on my growth potential and future value of the business? ANSWERS AND DISCUSSIONS TO ALL THE QUESTIONS ABOVE START IN THIS FIRST EPISODE OF OUR QUARTERLY ECONOMIC AND M&A MARKET UPDATE SERIES They are going to be segmented into three sections. Below are each of the three organizations, the topics, and we listed the starting point for each segment - along with the main highlights - so you can jump to one section if you’d like.    View Section: ITR Economics, Brian Beaulieu // 05:20 GF Data, Bob Wegbreit // 41:45  ButcherJoseph, Jeff Buettner // 1:19:30 First, you will get insights into the current macroeconomic environment, market trends and things to keep an eye on in the future; second, you will hear updates on the data behind recent private transactions, valuations, and deal volume and structures; and lastly, you will hear stories from people who are doing deals in the M&A market. This episode will be a bit longer because we had each organization give a bit about themselves, their company’s background, as well as where they get their information.  WHY ARE WE DOING THIS? We want to bring to you resources - typically only accessed by people at the heart of private M&A deals and the capital markets - so you can make better decisions, grow the value of your company, and get where you ...

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June 30, 2022 01:04:13
#307: [Owner Success Stories] Are You Running a Lifestyle Business or Are You Creating a Valuable Asset?

#307: [Owner Success Stories] Are You Running a Lifestyle Business or Are You Creating a Valuable Asset?

Ep. #3 [THEME TWO]   We have two business owners, Rob Dube and Cindy Banchy, on the show to wrap up our second theme, “Are You Creating a Lifestyle Business or a Valuable Asset.” They share how they shifted their mindset to think about their company like an asset, what their future goals are, and how their lives - and businesses - have changed since they adapted this new mindset.    Rob and Cindy discuss the three areas they focused on to help them run their company like and as an asset: trust your people, understand your financials (using the three financial statements), and follow your vision. Both of them dive deep into those three areas and pretty much give away the start-to-finish foundational points that will allow you to turn your business into a valuable asset, create future options, and how to successfully sit in the “owner’s box” instead of the management team.   //WATCH THE INTERVIEW ON YOUTUBE: Intentional Growth™ Podcast   What You Will Learn What it took for Cindy and Rob to shift their mindset to view their company like a financial asset and not just a job. Why Rob believes financials truly tell the story of the health of a business. How each business owner views their company and their relationship with the business and management team. Ownership roles vs. management roles and how that relates to normalized EBITDA. How each business owner separated their ego from their business to better run their business like an asset. ...

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