Soundpoint Newsletter
February, 2014:  Volume 14

Welcome to the Soundpoint Newsletter. We recently changed our name from Turning Point Financial to Soundpoint Consulting to  better reflect our focus on strategy, operations and finance. Check out our new website at  


We use this newsletter to share our perspective on topics and illustrative case studies that we think might be of interest to business owners and leaders. If there is a topic you would like our viewpoint on, please shoot us an email. 

This month I would like to share some of the key components that affect business valuation.  As most of these require years to improve, it is a good idea to keep them in mind as you grow and manage your business today.


Business Valuation Scorecard: 7 Key Components


Whether consciously or not, many business owners and leaders have their eye on the end game, more commonly known as an exit strategy. Whether you are an owner, manager or stock holder, presumably your interests are aligned to maximize the value of the company. The more valuable the company, the more you will get out of it - either in compensation, severance, profit-sharing or proceeds from a sale.

Increasing the value of a company requires years of planning and execution. Most valuators look at the last five years of operating results to substantiate their conclusions. So, let's look at maximizing the value of your business today for a potential sale or transfer tomorrow.


Below are seven factors to consider, which can impact the value of your business:

1.  Operating History, Earnings Growth

The ability to grow and generate profit is one of the driving factors for an increased valuation. Nothing is more valuable than a well-conceived and executed operating plan with demonstrated results.


2.  Reliance on Key Personnel

The overall valuation of a business will decrease if the business is overly reliant on the owner, founder or any other individual. If the future viability of the business can potentially walk out the door, buyers will be less willing to pay a premium for the company. 


3.  Diversification

A healthy business is not overly reliant on any one customer, supplier, product, or geographic area. If the revenue or earnings of the company are dependent upon the relationship of a few customers or suppliers, then a potential buyer will perceive this as increased risk and will not be willing to pay a premium. Same is true for a single product line company or one operating in a limited geographic area.   


4.  Competitive Position

Financial buyers want a return on their investment and will pay more for companies with a strong competitive advantage (and attractive future growth opportunities). On the other hand, strategic buyers may be interested in companies with weak competitive positions if they believe they can enhance the market position of the company - and hence the value, once purchased. But, they won't necessary be willing to pay for it!


5.  Work Force

It is generally presumed that the workforce will stay on with the company. There is great value to a potential buyer if employees are well tenured, experienced and reliable. A strong middle management team that can weather the transition and continue to forge the business ahead can be invaluable to a potential suitor and will increase the valuation of your company.


6.  Financial Risk / Contingent Liabilities

Not surprisingly, buyers are looking for a reasonably strong balance sheet with good liquidity and working capital. Contingent liabilities - such as outstanding litigation or a environmental issue - would be assessed and a discount taken for a presumed outcome of the pending issue.  


7.  Size

Yes, size matters. The larger the company, the less perceived risk and the higher the market valuation multiple.  It is a straight-forward and time-tested correlation.


As you are developing your 2014 Operating Plan, consider the factors outlined above.  Paying time and attention to these areas will not only build a stronger company today, but will also enhance the likelihood of a graceful exit tomorrow with a nice nest egg for all of your efforts. 


Until next month, Point Your Business Where it Needs to Go! 



Best Wishes,


©2014, Soundpoint Consulting, LLC

Sound Consulting. Solid Results.

In this Issue

Business Valuation Scorecard:  7 Key Components

Soundpoint News

It has been a big couple of months for us!


We changed our name from Turning Point Financial to Soundpoint Consulting.


We launched our new website at: soundpointbusiness


Kelly Deis completed the certification process to earn the designation of Certified Valuation Analyst®. (CVA) from the National Association of Certified Valuation Analysts (NACVA™).
What We Do
Is your organization as efficient and effective as possible?

Is your business lagging and you need help righting the boat?

Do you need a realistic valuation of your business?
If you need help thinking about these and other strategic and operating and financial questions, give us a call.  We specialize in:


Strategy & Operations:  from realistic growth strategies to efficiency improvement


Finance:  from financial modeling to infrastructure build-out. 

from business valuations to turnarounds and M&A support 


Kelly Deis, Turning Point Financial
Kelly Deis, President
About Soundpoint
Soundpoint Consulting is a business consulting and valuation firm serving small and mid-market companies in the Seattle and Puget Sound region. We focus on helping high growth and transitioning companies grow profitably by performing deep financial analysis, translating insights into impactful operating initiatives, and backing those recommendations with execution support. 

We provide business valuation services for companies and business owners for purposes of gift or estate taxes, divorce proceedings, buy/sell agreements, or a potential acquisition.  

Newsletter Archives

January, 2014:

Client Snapshot: Medical Practice Cash Flow Forensics


December, 2013;

Your 2014 Budget:  A Roadmap for the Year


November, 2013:

Client Snapshot:  Finance Group Assessment and Improvement


October, 2013;

Dashboards: Your Blueprint for success


September, 2013:

Client Snapshot: Administrative Cost and Efficiency Improvement


and more ...



Contact Us

Soundpoint Consulting, LLC

Kelly Deis, President

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