Experts advise entrepreneurs on strategic business exit
Business exit experts at the CompexAfrica business exit forum have advised entrepreneurs on different ways they can exit their businesses as well as carry out business valuations they want to sell or buy.
The CompexAfrica platform, which has over 90 businesses worth billions of naira listed on it for sale, brought together some business buyers and sellers recently.
The experts shared their experiences on how to prepare a company for sale, and how to value small businesses by Damilola Aloba, a Director from Ernst & Young.
Aloba in his presentation said; “Business valuation is an art and not a science”. It depends largely on the aims and objectives of either the buyer or seller at a particular point in time.
The three fundamental approaches to business valuation are Asset-approach, Market-approach and Income-approach. He further demonstrated how intrinsic and relative valuations can be used.
In intrinsic, the value of an asset is estimated based upon the business cash flow, growth potential and risk. While in relative valuing, assets are valued by looking at what the market prices of similar assets are. That is, what is the comparable or similar price of such asset, and standardized price.
On legal and intangible asset valuation, Ikechukwu Ubahakwe, Partner, Astute & Young advised entrepreneurs to ensure they engage experts if they want to buy or sell a business. He emphasized the need to carefully examined the existing legal agreement to know if the seller has the right to sell and to whom they can sell to.
Collins Onuegbu, Executive Vice Chairman Signal Alliance wants entrepreneurs who plan to sell to have a clear-cut objective for their decision, then prepare their business for partial or full sale by ensuring that a 3-year account statement, and a business plan are in place.
CompexAfrica is a business exit platform portal that has created the first online market place to facilitate the buying and selling of businesses and companies in Nigeria and across Africa. The company received seed money and incubation from Sasware, the technology investment subsidiary of Signal Alliance.
Jumoke Akiyode