15 Jul Around the Web: A Week in Summary
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The International Business Brokers Association recently released its Summer 2021 Issue of IBBAinsights Magazine which discusses a variety of topics pertinent to the business brokerage industry. The quarterly digital publication includes a letter from IBBA Chair Lisa Riley and several articles of interest.
Topics covered in this issue include:
- Proposed tax laws
- Deferred sales trusts
- Capital gains tax
- Legislative updates
- Blue sky value
A recent article from Forbes entitled “How Much Is Your Business Actually Worth?” discusses the importance of determining the value of an online business and how to go about doing so. Knowing how much your business is worth gives you a realistic idea of what you could sell it for.
For most online businesses, a reasonable way to determine value is to multiply average monthly net profit by 36x – 60x. When determining the proper multiple, influencing factors may include the age of the business, the pool of potential buyers, the growth potential of the business, how protected the business is from competition, and the management demands.
A recent article from Exit Strategies Group entitled “Seller’s Market Sentiment Back to Pre-Covid Levels” discusses the results of the 2021 Q1 Market Pulse Survey by the IBBA and M&A Source. This survey gathers insights from transaction professionals across the country to get an understanding of the current state of the market.
Approximately two thirds of transaction professionals consider it a seller’s market for businesses worth $1 million or more.
Seller sentiment has improved over the last few quarters, rebounding from the massive drop in the first half of 2020.