Podcast #177: Ken Sanginario
Hosted by Ryan Tansom
Learn how you could double the value of your business by de-risking your company specific risk and focusing on the 8 functional areas of a business
We are kicking off a mini-series on How to Increase the Value of Your Business. The 4th principle in the 5 Growth & Exit Principles is, INCREASE Value. Once you know what Your Drivers (Principle #1) and have your 3 Financial Targets identified and on track (Principle #2) and a rough idea what your ideal exit and timeline is (Principle #3) then you are ready to grow the value of your business with the end in mind.
Regardless of whether you want to exit your business next year or 20 years from now, if you focus on creating value but reinvesting in your business, making your cash flow more sustainable, predictable and transferable, you will create many more exit options and have a much more valuable business... it's the only way to run a business!
Ken Sanginario is the founder of Corporate Value Metrics and creator of the Value Opportunity Profile. He is also an educator who teaches business owners about the importance of intrinsic value. He has a myriad of certifications and credentials that make him the ideal guest for this subject.
If you are a business owner or looking purchase a business today’s episode is chalked full of information about the Value Opportunity Profile and Company Specific Risk. This standard system will help business owners create a business that stands up to due diligence and draws in the ideal buyer.
We also discuss the disturbing trend that is surfacing in the market. Many baby boomers are getting ready to go to market, and there aren’t enough buyers to help them all. Because of this issue, only 6-7% of baby boomer sellers get a favorable outcome from their sell.
Ken is quick to explain how his assessment system is important to the baby boomer issue. He also explains how the assessing process came about and how it has reached an international audience.
What you will learn:
Ken’s time as a business consultant.
His experience as a CPA, CFO, and his multiple credentials.
How Ken designed the Value Opportunity Profile.
Why Ken felt the need to create a standardized process.
The Company Specific Risk metric and what it means.
The 3 traditional approaches of value assessment.
Why the market approach is a shaky approach and multiples are meaningless.
Why the income approach is considered the one true method.
The pros and cons of value assessment approaches.
The 3 parts of the discounted cash flow method.
The 8 primary categories to create maximum value.
The 50 subcategories that are based off the prime 8.
How Ken’s system is connected to due diligence.
The 2 components of cost of capital.
What is intrinsic value?
The difference between a financial and a strategic buyer.
The baby boomer issue and how younger business owners can help.
Run your company at the highest quality at all times.
Takeaways:
If you are a business owner, Ken’s program is essential to maximizing your business’s value. You need to focus on intrinsic value and create a business that is ready to sell. The more work you put into your value building, the more confident you’ll be at the negotiation table.
Links and Resources:
Corporate Value Metrics
Ken’s email address
508-870-5805
About Ken:
Ken Sanginario is the Founder of Corporate Value Metrics, creator of the Value Opportunity Profile® (“VOP®”), and developer of the prestigious new Certified Value Growth Advisortm (“CVGAtm”) training and certification program.
Ken has more than 30 years of experience providing executive leadership and strategic advisory services to private middle market companies, developing and executing business improvement initiatives, turning around distressed operations, managing M&A transactions, valuing companies, and securing equity and debt growth capital.
He is an instructor in the training and certification programs of the Alliance of M&A Advisors, Pinnacle Equity Solutions, and the Exit Planning Institute, teaching about business value growth in each program. He also serves on the advisory board of the MidMarket Alliance as its educational leader, and serves on the Boards of Directors of several privately held companies.
Ken is a frequent speaker at national and regional conferences and private business owner functions, and has authored numerous articles on business value growth, corporate valuations, mergers & acquisitions, and turnaround management. He is also the Board President of Solutions at Work, a charitable organization focused on breaking the cycle of recurring poverty and homelessness.
Ken’s credentials include:
CVGA (Certified Value Growth Advisor)
CM&AA (Certified M&A Advisor)
CTP (Certified Turnaround Professional)
CPA (Certified Public Accountant)
ABV (Accredited in Business Valuation)
CVA (Certified Valuation Analyst)
MSF (master’s degree – finance)
MST (master’s degree – taxation)
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