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Frequently Asked Questions

What exactly is a business strategy?

 The selection and application of resources to achieve company goals and obtain a competitive advantage in the marketplace while protecting, sustaining and enhancing the skills and assets needed in the future.

What are the benefits of business strategy?

  • Forces the team to look at the big picture.

  • Helps the team focus on what is important for the company and prioritize the use of resources.

  • Helps the team coordinate their efforts.

  • Helps the team understand others members concerns and goals.

  • Puts in place a schedule to keep team members on track.

  • Holds team members accountable and can alter their efforts if progress is not being made.

    Strategy makes the whole company greater than the sum of its parts

 

How much is my business worth?

There are three basic methods of valuing a business.  The first method is known as the Asset Based Approach.  This method derives an indication of value based on the costs to replace tangible assets in similar condition and technology level.  If the earnings of the business will not justify a value greater than the tangible assets, then at the very least, the value of the business is the value of the tangible assets.

Next, we have the Market Approach. Here, the value is based on ratios or factors derived from the earnings, sales, or assets of past transactions within the PCB industry.  The most commonly used factor is the multiple of earnings.

The last of the three most commonly used methods to value a business is the Income Approach.  Although there are slightly different ways to calculate the value using this method, they all deal with the same concept: the net present value of expected discretionary earnings.

When using one of these methods, many factors are taken into account, such as:

  • History of earnings.
  • How long the company has been established and what the current trends are.
  • Is the property owned or leased?
  • Deal structure (i.e. notes taken back, non-competes, employment contracts, etc.)
  • Quality of the management team.
  • Established customer base.
  • Expected growth potential.
  • Any negative issues concerning the business such as lawsuits or environmental problems.

When all is said and done, it boils down to what a buyer is willing to pay.  Capitol Technologies has a great deal of experience with mergers and acquisitions in the PCB industry.  In addition, we have a great deal of experience operating PCB companies.  Therefore, with each potential buyer we can present to them a tailored outline of how your shop would best fit in their portfolio.  This translates into the best possible selling price.

How do you keep this process confidential?

Capitol Technologies understands that public knowledge of a potential sale can adversely affect the attitudes and actions of customers, employees, competitors, lenders, suppliers, and investors and, thus, diminish the value of the company.  Therefore, marketing of your company is done very discreetly.  Potential buyers are qualified and required to sign a non-disclosure statement outlining their responsibility in having access to the sellerís confidential information.  Only then is any detailed information concerning our client disclosed.

Based on the recent trends in the PCB industry and the effects they have had on my companies performance over the past few years is now a good time to sell?

Timing, of course, is vital.  An objective overview should be taken of your business, the PCB industry and the overall economic picture, to assess if and when is a good time to sell.  Some circumstances make it easier to sell a shop regardless of timing Ė for example if you operate in a highly specialized niche portion of the market with good contacts or have an excellent customer base.  Almost without exception, a good quality shop will sell. 

What information will I need to facilitate the selling process?

Here is a list of the key items needed prior to taking the business to market:

  • Statements from the three most recent fiscal years - P&L, balance sheet, and cash flow.
  • Copies of marketing brochures and any promotional materials.
  • List of equipment.
  • List of loans and encumbrances related to the business with balances and payment schedules.
  • Copies of any equipment leases.
  • Copies of any employment contracts or sales representative agreements.
  • List of industry approvals and status.
  • List of all regulatory permits and status.
  • A short history of the business.
  • Names of outside advisors - accounting, legal, etc.