Let's Talk Business 3 August: Greg Hayes & Christena Singh

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


Most businesses are valuable


When is value normally tested

Value my business


• 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


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


How do we measure


• Normally– 3 years before– The current year– The forecast for next year

What time period do we look at


What influences value?


How to grow your value


Expectation equity


The value of knowing your worth


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

/80

1980

/81

1981

/82

1982

/83

1983

/84

1984

/85

1985

/86

1986

/87

1987

/88

1988

/89

1989

/90

1990

/91

1991

/92

1992

/93

1993

/94

1994

/95

1995

/96

1996

/97

1997

/98

1998

/99

1999

/200

0

2000

/01

2001

/02

2002

/03

2003

/04

2004

/05

2005

/06

2006

/07

2007

/08

2008

/09

2009

/10

2010

/11

2011

/12

2012

/13

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

0

1

2

3

4

5

6

7

8

Jan-08

Feb-08

Mar-08

Apr-08

May-08

Jun-08

Jul-08

Aug-08

Sep-08

Oct-08

Nov-08

Dec-08

Jan-09

Feb-09

Mar-09

Apr-09

May-09

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%


15%


(general)

Economic climate



No concerns = 29%


15%

13%


(general)

Economic climate

Cash flow



No concerns = 29%


15%

13%

7%

6%

6%


Economic climate

Cash flow

Paperwork/ bureaucracy

Finding/ keeping staff

Competition



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



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%


What do growth businesses have in common?

They are more confident…


51%

10%

Growth Non-growth

They are more likely to export…


14%10%

Growth Non-growth

They are more likely to grow their sales:


34%

22%

Growth

Non-growth

Employment…


14%

8%

Growth

Non-growth

And profitability…


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

Date post:	16-Nov-2014
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Let's Talk Business 3 August: Greg Hayes & Christena Singh

Education