Economy
Business Valuation: What You Should Know Before Selling
Whether a sale is imminent or coming sometime in the future, every business should have a current valuation. Like business plans and resumés, valuations allow owners to leverage opportunities, protect their interests, and move quickly once they decide to sell. Here, we’ll outline a few things business owners and potential sellers should know about the valuation process.
Find the Right Reasons for Valuation
An accurate valuation is essential for various reasons. First, it keeps an owner from losing money, and second, it may work to reassure a reluctant buyer. Before working with a brokerage and obtaining a valuation, clean up your company’s financials. It may take time and effort, but it will pay significant dividends in the end. If you’re thinking of hiring a business broker, the team at CGK Business Sales is always ready to help.
If you need some assistance cleaning up your finances, you can always outsource and reach out to bookkeepers like Holbrook & Manter bookkeeping services. They can help you manage your financial reports and ensure that your books are organized to help you decide before you start working with a business broker. Having clean records will help the process run smoothly and prevent delays.
Valuations Help Sellers Get Fair Market Value and Increase the Chances of a Successful Sale
Of all the reasons to get a valuation, this is one of the most important. Many owners, especially those with small and family-run businesses, rely on sales to fund future opportunities or enjoy a more comfortable retirement. We’ve all heard stories about owners who sold their companies for much less than their market value, as well as those who priced their companies too high and could not find a buyer.
While hiring a valuation specialist may be costly, it’s a good long-term investment because of the future savings it brings. When a business is accurately valued, owners will be able to time sales properly, increase their negotiating power, and boost potential profits.
A Business Valuation Will Help an Owner Make More Informed Decisions
When valuing a business for sale, it’s important to consider the right factors. Accurate valuations allow owners to gauge performance and measure changes over time, which in turn, gives them the information needed to make strategic decisions.
The valuation process provides a holistic view of a company, helping potential sellers make decisions that increase their return on investment. Not only will a valuation keep you from making the wrong choices, but it will also prevent the consequences that may follow.
Making a Graceful Exit
When done properly, business valuations give owners a baseline from which other efforts can be initiated. The information gathered during a valuation will let you know whether the sale is going in a good direction or if improvements must be made before the company goes on the market.
The baseline shows prospective buyers how well the company is performing, which may reassure those who are unsure. Performing a valuation is like taking the pulse of a business, and it’s especially beneficial when an owner seeks to increase profits before the sale takes place.
Managing Plans of Succession
In some cases, business owners sell to family members. Alternatively, you may want to sell to a strategic buyer who can use existing revenue streams to generate more profits. No matter who the business is going to, it’s still important to know its actual value.
Helping Business Owners Accurately Value Their Companies
A business valuation may fulfil multiple functions, such as ensuring higher profits and providing a degree of reassurance to buyers and sellers. If valuations are used correctly, owners and potential buyers will know exactly what to expect from a company. Call the team at CGK Business Sales for valuation help and advice.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed flat on Wednesday, August 5, as the market witnessed weaker trading activity with only two deals executed.
In the midweek session, the volume of securities exchanged by investors dropped 99.9 per cent to 802 units from the 1.6 million units recorded on Tuesday. The value of securities further decreased by 99.6 per cent to N208,240 from the preceding session’s N47.6 million, and the number of deals significantly went down by 93.9 per cent to two deals from the 33 deals recorded a day earlier.
Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and Central Securities Clearing System (CSCS) Plc with 76.9 million units transacted for N5.5 billion.
GNI Plc was also the most active stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units valued at N415.7 million.
There were no price gainers or losers yesterday.
As a result, the market capitalisation stood unmoving at N2.739 trillion, while the NASD Security Index (NSI) remained unchanged at 4,563.96 points.
By Adedapo Adesanya
The Naira slid against the US Dollar by N2.28 or 0.17 per cent in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Wednesday, August 5, to N1,363.85/$1 from N1,362.55/$1.
The local currency also declined against the Pound Sterling in the official market during the session by N5.97 to close at N1,837.38/£1 compared with Tuesday’s closing rate of N1,831.41/£1, and against the Euro, it crashed by N6.54 to quote at N1,575.25/€1 versus the preceding session’s N1,568.71/€1.
But at the black market, the Nigerian Naira traded flat against the greenback yesterday at N1,400/$1, and also remained unchanged at the GTBank FX desk at N1,373/$1.
The Central Bank of Nigeria (CBN) says rates have narrowed to below two per cent, while the country’s external reserves have risen above $52.5 billion, reflecting the impact of its ongoing monetary and foreign exchange reforms.
CBN Governor Yemi Cardoso, represented by the Acting Director of Corporate Communications and Investor Relations, Mrs Hakama Sidi-Ali, disclosed this on Tuesday during the CBN Fair in Gombe. He noted that reforms introduced since 2023 had significantly reduced the disparity between the official FX market and the parallel market.
“The Naira continues to strengthen, with the spread between official and Bureau de Change rates now below two per cent,” he said, adding that reserves at $52.5 billion were supported by sustained inflows and renewed investor confidence in the economy.
Interbank FX transactions slid as weaker market activities dropped total Dollar volume exchanged to $75.35 million, a 51.8 per cent decline from $156.23 million in turnover quoted at the previous close.
The deals at the NFEM window also fell as data from the central bank put Wednesday’s quote at 82 from 139.
In the cryptocurrency market, major were down as global risk sentiment softened as a key world equity index slipped and chipmakers fell.
The MSCI All Country World Index snapped a five-day run to fall 0.2 per cent as chipmakers retreated on both sides of the Pacific. South Korea’s Kospi, a bellwether for the AI trade, dropped 4.4 per cent.
Ripple (XRP) depleted by 1.7 per cent to $1.05, Binance Coin (BNB) decreased by 1.0 per cent to $594.87, Cardano (ADA) depreciated by 0.9 per cent to $0.1884, TRON (TRX) shrank by 0.2 per cent to $0.3261, Solana (SOL) crumbled by 0.1 per cent to $74.00, and Dogecoin (DOGE) went down by 0.1 per cent to $0.0697.
On the flip side, Ethereum (ETH) gained 2.3 per cent to trade at $1,911.41, and Bitcoin (BTC) rose by 0.8 per cent to $64,759.28, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
By Dipo Olowookere
The domestic stock exchange rebounded by 0.05 per cent on Wednesday on the back of renewed bargain-hunting by investors, though the level of activity waned.
After bleeding for a few days, the Nigerian Exchange (NGX) Limited heaved a sigh of relief yesterday, as the All-Share Index (ASI) gained 109.41 points to close at 244,912.24 points compared with the previous day’s 244,802.83 points, and the market capitalisation garnered N71 billion to settle at N158.087 trillion versus Tuesday’s N158.016 trillion.
Business Post reports that despite the rebound recorded by Customs Street at midweek, the market breadth index remained negative, as there were 20 price advancers and 29 price decliners, implying bearish investor sentiment.
Linkage Assurance appreciated by 9.94 per cent to N1.77, AVA Capital rose by 9.55 per cent to N10.90, Fortis Global Insurance advanced by 7.69 per cent to N2.80, McNichols gained 7.34 per cent to finish at N5.85, and Coronation Insurance surged by 5.51 per cent to N2.49.
Conversely, Honeywell Flour depreciated by 9.94 per cent to N16.30, PZ Cussons gave up 9.94 per cent to trade at N74.75, Zichis crashed by 9.74 per cent to N20.76, Learn Africa slipped by 9.62 per cent to N9.40, and Neimeth tumbled by 8.33 per cent to N8.25.
The busiest equity was FCMB, with a turnover of 369.2 million units valued at N4.1 billion. Chams transacted 46.7 million units worth N201.8 million, First Holdco transacted 43.5 million units for N5.7 billion, Access Holdings sold 29.8 million units worth N778.0 million, and Linkage Assurance exchanged 19.6 million units valued at N33.5 million.
At the close of transactions, market participants bought and sold 824.1 million units worth N25.5 billion in 48,114 deals, in contrast to the 1.6 billion units sold for N28.7 billion in 54,160 deals a day earlier, showing a shortfall in the trading volume, value, and number of deals by 48.49 per cent, 11.15 per cent, and 11.16 per cent, respectively.
