Key Drivers of Valuation in the Sale of a Business, with John Marsh, The Bristol Group
John Marsh: [00:00:00] Clean books and records is the first thing. If they’re going to give me a financial statement that I can understand, doesn’t have any balance sheet items, a good test for me is how did you record the PPP? If you got PPP money, how did you record? And if they recorded it as revenue, we’re going to have to have a conversation. So, clean books and records.
John Marsh: [00:00:19] Owners involvement, how heavily involved is the owner? I’ve got a plumbing company right now, he’s got 19 technicians. He’s not going out and servicing customers. But if he had two, three technicians, and he’s out working 45 hours a week in the field, that’s not likely a sellable business. So, owners involvement. Revenue concentration or customer concentration, reoccurrence of revenue, the contracts. Do you have contracted revenue?
John Marsh: [00:00:47] So, all of those things kind of play into the range of value for the business. But those are some of the things we ask about right at the beginning, you know, clean books and records. What do you do in day to day as an owner? What’s your revenue contracting or reoccurrence of revenue look like? How is it contracted? Those type things.
John Marsh, Managing Broker, The Bristol Group of Greater Atlanta
Prior to founding the Bristol Group of Greater Atlanta, John served as a corporate executive with experience leading and strengthening finance, accounting, and operations organizations. He has held a variety of executive-level roles including CFO, VP of Supply Chain and Planning, and EVP of Finance and Operations during his 17-year career.
In those roles, John served as an integral part of the leadership team that scaled a medical device company that was sold to a private equity firm for $162M. John led integration efforts and was a part of due diligence on all the company’s acquisitions. In total, John participated in over $360M in transactions in his executive roles.
John started his career with the accounting firm, Ernst and Young in Atlanta, GA, and has worked with both start-ups and large private equity-owned companies. He leverages his significant mergers and acquisition experience to help entrepreneurs successfully transition business ownership.
John graduated from the University of Georgia with a BBA in Accounting and holds an MBA from Kennesaw State University. He currently lives in Marietta, with his wife and two daughters.
Listen to the full Business Beat interview here.
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