The Business Reference Guide provides business transaction professionals with a wealth of up-to-date rules of thumb and essential pricing information on over 600 businesses. SCORE Lancaster-Lebanon have used the Business Reference Guide publication for over 10 years and find it extremely helpful when trying to help a client come up with a starting point in pricing a business to sell or buy.
Treasurer and Mentor Tom Roche brought this guide to SCORE HQ so that a national digital license could be made available for volunteers across the country to use. We offer a huge thank you to Tom for bringing this resource to our attention!
Access the BRG here: https://www.businessrg.com/users/login/
Use Cases include:
- The data reported in this guide comes from actual recent transactions. The annual guide is very helpful but by moving to an online subscription it should allow us even more timely updates so to allow us to more accurately assist our clients.
- This publication lists hundreds of businesses: from franchises like AAMCO, ACE Hardware, etc. to basic classified business-like tire stores or wineries, or specialty coffee shops.
- This provides annual benchmarks of recent trends as well as quick rules of thumb for a quick valuation. This is not intended to offer the client a solid, binding business valuation but only a starting point for them in their analysis.
- Use when assisting clients with buy/sell agreements. We have clients coming to us to help them understand an approximate value of their business as they inventory their net worth for retirement planning, etc.
This publication provides:
- Pricing tips, for example, an offer price based on as a percentage of EBIT or EBITA or annual sales.
- It also offers multiples of the seller's discretionary earnings as a starting point for an offer price.
- It will note certain traits for this type of business that are important such as customer loyalty or vendor transferability and allegiance.
- It notes benchmarks that are found in typical/like business for example percentages for COGS; Occupancy costs; Payroll/labor; pretax profit, etc.
- It will often provide a few questions to ask the seller for example what marketing efforts are currently underway or how do you measure customer loyalty or are your employees cross-trained. Things to help our client formulate their own questions.
- Current industry trends.
- Expert comments.
- Typical seller financing terms.
Read more about The BRG here: https://businessreferenceguide.com/about-brg/