Page 52 - MAC4861_2 Finance class slides part 2

VALUATIONS

Introduction

• When preparing for a successful sale, an entrepreneur

should obtain proper professional advice and further ensure
that certain key areas are given the appropriate attention.

• Investec (2013) highlighted the importance of

• clean and consistent accounting records

• clear and well-documented agreements, governing key
relationships (such as exclusive distribution rights)

• a clear understanding of the various drivers of value, for purposes
of a business valuation
• a clear understanding of the components of a business and how
they dynamically interact with other components where a portion

of the business will be retained (also for purposes of a business
valuation)

• strong legal agreements, such as shareholder agreements

• In addition, an entity should ensure proper compliance with
tax laws.

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