How to Value a Private Company - Small Business Valuation 101

[@illamaxilla]

You deserve 10 million followers for the quality of information provided. I wish KZbin rewarded for the "quality" of its content. This was amazing! Thank You!!

[@financekid3163]

Very kind of you to say, hopefully it adds value and demystifies the buy/sell marketplace. I appreciate you watching the videos.

[@diez9017]

Thank you, thank you! This is in my opinion the best M&A channel.

[@financekid3163]

Thank you, I agree!

[@lseul8812]

You are by far the most helpful finance channel/resource I have come into contact with. Phenomenal job. This is so helpful

[@financekid3163]

Thank you! I am glad you liked the videos.

[@Sunsunflower2000]

This is incredibly practical and helpful! I am a junior commercial banker and I found your material resembles a lot to what I face or encounter on a daily basis. Thank you so much for the thorough presentation. LOVE IT!

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Just wanted to appreciate the effort you put towards creating such informative videos!

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High quality content! Thank you for sharing the information! I’m subscribing to your channel!

[@financekid3163]

Awesome, thank you!

[@karishmajay4528]

Thank you so much! I can’t tell you how much you have simplified it all to get us started in this entire process. Here’s to great success for you✨

[@financekid3163]

Thanks for watching!

[@syedjeelani1136]

Great Explanation. Insightful

[@financekid3163]

Thanks for watching!

[@biggdaddy9227]

Concise. Logical. Excellent.

[@ggarciacota]

Great video with very clear explanation. Thank you very much for sharing your knowledge in a superb way.

[@harvlitt877]

As usual superb explanation ❤️❤️

[@DograO5]

Worth every penny of the KZbin Premium subscription! Great job on the video - very very helpful.

[@Financeforyou118]

Us non premium folks 👀

[@deanwilsher8189]

Great video. Thank you.

[@financekid3163]

Thanks for watching!

[@derekcummings3972]

Great video!!!! I immediately subscribed to your channel!

[@financekid3163]

Thanks for watching!

[@godlyconversations1]

This is an excellent job! Thank you for sharing such high quality knowledge

[@financekid3163]

Glad it was helpful!

[@marcojosezgimenez]

Is it possible to get your slides? It adds so much value that I want to look at it more turn based

[@TheXcelleratorLLC]

Quick question 🤔 regarding business valuations. Is there a way to use a business valuation to get a loan??

[@ricecube5079]

Far better information than all the other vids out there thank you !

[@sonerguney3225]

Very good. Can you please send the link for a download of thıs presentation. Thanks.

[@financekid3163]

Unfortunately the slides are not available for download. Thanks for watching!

[@jonc2430]

Thank you!!!

[@zikizaki2053]

How would one come up with a value figure for really small businesses? For instance if, let's say, the guy owning the Deli at the corner approaches me and offers me his business at "a discount". Or if a friend wants to sell his limousine service (with just a few cars and only 2 years of business history) to me. A DCF seems out of the question. But even a multiple based approach like you presented seems difficult to conduct as I’d assume there’s not really any reliable comp data to access.

[@financekid3163]

In small business situations, its either book value or a small 2-3 Seller discretionary earnings (SDE) multiple, its not based on EBITDA because you are usually just buying a job and the assets on the floor. You are right, DCF or a traditional EBITDA multiple approach wont work as well for these small businesses.

[@rohits7538]

Excellent, Thanks. When can I can expect the release of Part-2 ?

[@financekid3163]

Next Tuesday!

[@ellendarlison9012]

What if you’re a small highly scalable tech business? For example - if you’re only $1M EBITDA - you would fall into the small business range of 4x - 6x multiple. Given value drivers you would warrant a 6x multiple / but isn’t this multiple still too low for high growth tech companies - therefore would the size criteria be less relevant in this example?

[@ellendarlison9012]

Also when are you writing a book - I’ll be pre-ordering…

[@carwoman43]

What if there is no benchmark/multiple because you're in such a niche (though long lived) industry? There is no NAICS or SIC code for our industry.

[@financekid3163]

In some cash this is the situation and you would need to look at valuation from the buyers perspective where you would calculate the returns that can be generated from the investment assuming normal bank debt. What a buyer is ultimately willing to pay for depends on if they can meet normal return thresholds + what the market is willing to bear.

[@marcojosezgimenez]

Holy shit this is amazinggggggg

[@financekid3163]

Ha thanks for watching! There is also a part 2 video. I also have two more private valuations videos coming later this month with more case studies!

[@scotolivera8207]

Thanks a lot , Where can we find the EBITDA ranges as a resource ?

[@financekid3163]

Experience in the market! :) These ranges come from my firm and deal experience.

[@hatemakroush]

Perfect

[@dragonman74017]

Thank you. I am looking to buy a business from a boomer.

[@financekid3163]

Good luck! Thanks for watching.

[@saibhargav4236]

What is the material used in video any particular book.

[@financekid3163]

The material of experience!

[@scotolivera8207]

@@financekid3163 Very valuable

[@marcojosezgimenez]

This is literally how to be a business broker 101 lol

[@financekid3163]

A lot of viewers have been asking for more private company valuation case studies. I have posted a new video sharing some private company valuation mistakes and walking through real life case studies at the link below. Check it out to learn more! kzbin.info/www/bejne/d3m7h6pnYq-nepI

[@financekid3163]

See below the link to the part 2 video on business valuation with 4 case study examples. Thanks for your support! kzbin.info/www/bejne/omK6omyFZqahgck