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What’s Your Business Really Worth?
Greg Hayes Director, Hayes Knight
Moderated by Small Business Commentator Valerie Khoo
INNOVATIVE, ENERGETIC, STREET SMART
How much is your business worth?
Greg Hayes, Director, Hayes Knight
INNOVATIVE, ENERGETIC, STREET SMART
Most businesses are valuable
INNOVATIVE, ENERGETIC, STREET SMART
When is value normally tested
Value my business
INNOVATIVE, ENERGETIC, STREET SMART
• Around 1.8 mill SMEs• 40% will experience a
succession event in next 5 years• A $100 billion + transfer of
value• Industry convergence
Some stats worth knowing
INNOVATIVE, ENERGETIC, STREET SMART
Revenue Size Valuation approach
Less than $500K Industry based method or could have no value
500K to $3 mill. Value should exist – most likely earnings
based approach+ $3 mill. Most common earnings
based
How value is measured
INNOVATIVE, ENERGETIC, STREET SMART
How do we measure
INNOVATIVE, ENERGETIC, STREET SMART
• Normally– 3 years before– The current year– The forecast for next year
What time period do we look at
INNOVATIVE, ENERGETIC, STREET SMART
What influences value?
INNOVATIVE, ENERGETIC, STREET SMART
How to grow your value
INNOVATIVE, ENERGETIC, STREET SMART
Expectation equity
INNOVATIVE, ENERGETIC, STREET SMART
The value of knowing your worth
INNOVATIVE, ENERGETIC, STREET SMART
How much is your business worth?
Greg Hayes, Director, Hayes Knight
Current economic conditions – challenges and opportunities
for small business
Christena SinghAuthor – Sensis® Business Index
Australians turn to Sensis’ information services almost 70 million times a week.
Millions of Australians rely on Sensis every month:
• Print: 10m monthly unique users• Online: 8.8m monthly unique visitors• Voice: 2.6m monthly unique users• Sat nav:1.7m monthly unique users• Mobile: 1.8m monthly visits
Almost 600,000 Australian businesses rely on Sensis for customers
The Yellow Pages™ network
Forecast growth… is your business planning for it?
Source: ABS Catalogue Number 5206.0 and Treasury.
2.00
%
3.25
%
4.00
%
3.00
%
3.00
%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
1977
/78
1978
/79
1979
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1980
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1981
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1982
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1984
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0
2000
/01
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2009
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2010
/11
2011
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2012
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2013
/14an
nu
al p
erce
nta
ge
chan
ge
80s recovery 90s
recovery forecasts
Average growth over 30 year period
Sensis® Economics and Market Intelligence Group
-2%
-1%
-1%
0%
1%
1%
2%
2%
3%
3%
Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09
quart
erly
perc
enta
ge c
hange
National quarterly change in GDP -seasonally adjusted
NSW quarterly change - seasonally adjusted
Growth in NSW
SOURCE: Australian Bureau of StatisticsCatalogue 5206.0, December quarter 2009
SOURCE: Australian Bureau of Statistics
Catalogue 8731.0, June 2010Sensis® Economics and Market Intelligence Group
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Jan-08
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Mar-08
Apr-08
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Jun-08
Jul-08
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Nov-08
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Jan-09
Feb-09
Mar-09
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Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09
Jan-10
Feb-10
Mar-10
Apr-10
May-10
Jun-10
month
ly p
erc
enta
ge c
hange
National monthly change in unemployment- seasonally adjusted
NSW monthly change
Unemployment trending downin New South Wales
-10%
%
10%
20%
30%
40%
50%
60%
70%
80%
Feb-00 Feb-01 Feb-02 Feb-03 Feb-04 Feb-05 Feb-06 Feb-07 Feb-08 Feb-09 Feb-10
Australia New South Wales
SOURCE: Sensis® Business IndexSweeney Research – June 2010
Sensis® Economics and Market Intelligence Group
Sensis® Business IndexSME confidence – New South Wales
The issues keeping small business operators in up at night…
23%Lack of work/ sales
(general)
Q. As far as your business is concerned, what problems, if any, are you facing at the moment?
SOURCE: Sensis® Business Index June 2010
No concerns = 29%
The issues keeping small business operators in up at night…
15%
23%Lack of work/ sales
(general)
Economic climate
Q. As far as your business is concerned, what problems, if any, are you facing at the moment?
SOURCE: Sensis® Business Index June 2010
No concerns = 29%
The issues keeping small business operators in up at night…
15%
13%
23%Lack of work/ sales
(general)
Economic climate
Cash flow
Q. As far as your business is concerned, what problems, if any, are you facing at the moment?
SOURCE: Sensis® Business Index June 2010
No concerns = 29%
The issues keeping small business operators in up at night…
15%
13%
7%
6%
6%
23%Lack of work/ sales
Economic climate
Cash flow
Paperwork/ bureaucracy
Finding/ keeping staff
Competition
Q. As far as your business is concerned, what problems, if any, are you facing at the moment?
SOURCE: Sensis® Business Index June 2010
No concerns = 29%
The issues keeping Sydney small business operators in up at night…
19%
15%
9%
7%
5%
23%Economic climate
Lack of work/ sales
Cash flow
Finding/ keeping staff
Lack of work/ sales(industry specific)
Competition
Q. As far as your business is concerned, what problems, if any, are you facing at the moment?
SOURCE: Sensis® Business Index June 2010
No concerns = 22%
About half want growth…
6%6%
We are seekingsignificant expansion
We are seeking togrow moderately
We are seeking to staythe same size
We are seeking tobecome smaller
45% 43%
SOURCE: Sensis® Business Index June 2010
What do growth businesses have in common?
They are more confident…
SOURCE: Sensis® Business Index June 2010
51%
10%
Growth Non-growth
They are more likely to export…
SOURCE: Sensis® Business Index June 2010
14%10%
Growth Non-growth
They are more likely to grow their sales:
SOURCE: Sensis® Business Index June 2010
34%
22%
Growth
Non-growth
Employment…
SOURCE: Sensis® Business Index June 2010
14%
8%
Growth
Non-growth
And profitability…
SOURCE: Sensis® Business Index June 2010
31%
21%
Growth
Non-growth
6.92
6.49
6.47
Economicsustainability
Socialsustainability
Environmentalsustainability
SOURCE: Sensis® Business IndexSweeney Research – June 2010
Q. On a scale of one to ten – where one means you are not concerned at all and ten means you are very concerned – how concerned are you about…
(Chart shows mean rating on 10 point scale)
SMEs are care aboutsustainable growth…
Thank you
Christena SinghAuthor – Sensis® Business Index
www.about.sensis.com.au
What’s Your Business Really Worth?
Moderated by Small Business Commentator Valerie Khoo
Greg Hayes – Director, Hayes Knight
Christena Singh – Deputy Chief Economist and Author of Sensis Business Index