Southard Financial is excited to announce an addition to our lineup of valuation experts that will give our clients yet another powerful partner when it comes to establishing accurate and professional valuations nationwide. Please welcome Ed Usalis to the Southard team!
“We know that our clients expect the most reliable valuations from us. And over the past 30 years we have set out to provide the absolute best experience for our clients,” says Mark Orndorff. “So when we met Ed, we knew he would be a perfect compliment to our team.”
2020 dealt a significant blow to nearly every sector of the U.S. economy, and bank stocks were possibly the hardest hit. While the overall stock market began to improve in the second half of the year, the banking sector continued to suffer.
Concerns over low interest rates and loan losses from struggling businesses created a lot of uncertainty. The result was that bank stock prices did not climb along with the rest of the market.
2020 was a pretty wild ride for all kinds of businesses.
While we’re all glad to see it in the rearview mirror, there are some after-effects regarding valuations that you might want to consider.
Many businesses report “goodwill” on their balance sheets. Goodwill is an intangible asset on a company’s books that reflects the amount of the purchase price paid for a company’s net assets above the fair value of acquired tangible and other intangible assets in a sale transaction. Unlike some other assets, goodwill does not necessarily amortize over time, but it can be worth less than its original value. (More on that in a minute.)
When it comes to the process of selling your business, there are several things that can ruin an otherwise good deal.
Over the years, we have seen plenty of deals go off the rails. It’s always an unfortunate event. Like we mentioned in our previous post, it can happen when owners and buyers can’t see eye-to-eye on the value of the business. When owners are unwilling to budge in spite of all the evidence pointing to a lower value, many buyers will simply walk away.
There are plenty of other factors that have the potential to wreak havoc on a transaction, including but not limited to:
Here’s something you don’t usually hear a transaction advisory firm say: sometimes we can’t sell your business!
It’s not for lack of preparation. At Southard Financial, we go over every client’s business situation with a fine-toothed comb to accurately determine the value range of what their company is worth.
It’s not for lack of experience. In our case, we’ve been at this for over 30 years.
Why Deals Die