We had the privilege to be asked to present at the RCEDI Summit 2022 put on by CSA – Community Sustainability Enterprise.

Topics included lessons learned from business valuation and exit planning to help the participants who are considering leaving the workforce through entrepreneurship or ETA (entrepreneurship through acquisition). One of several points shared was that when it comes to valuation:

It’s not what you make, it’s what you take. 

Most consider ‘what you make’ to be their revenue or gross sales.  While you want to be growing this faster than your industry sale growth rates, it’s not as important as your net.  This gets to the ‘it’s what you take’ piece.  This means you really need to be looking to your profitability in terms of your EBITDA – earnings before interest, taxes, depreciation, and amortization.  Again you don’t look at this in isolation, you look relative to your peers via benchmarking.
A taste of more that was instilled in the participants can be found here: https://youtube.com/shorts/JNn8LMTx-A8?feature=share
Full Video forthcoming.