Jim Peters recently became partner in Smithville-based Ameriseal of Ohio Inc. after studying the company for two years.
“I didn’t buy it until I knew it would work,” he says of his company, which provides long-term pavement surfaces. “I’m not a risk-taker.”
Peters says people buy a company based on what they think they can get out of it on an annual return or what they can bring to the table “to make one and one equal four.”
“If you can take money, put it into a business, draw out 10 (percent) or 20 percent annually, and you can clean it up so it’s nice and pretty, then that is how you decide what you’re willing to pay for it,” he says. “How much money would you throw into a stock if you were pretty positive you could control its appreciation from $10 to $40 a share? How much would you put into there? Everything you had, wouldn’t you?”
Peters says many hard-working business owners have all the risks and liabilities associated with running a company, “and, in fact, have something that’s worthless.” That’s why he believes in hiring an expert to determine the value of the company.
“Depending on what they tell you, you have to take that information and say, ‘Maybe I’d better run my business a little differently,’” he says.
He also says business owners should do an annual valuation.
“Don’t you check the value of your stocks once a year? Don’t you pay attention to what the value of your house is, see what the neighbor’s (house) sold for?” he says. “Why wouldn’t you do that with your business?”
HOW TO REACH: Ameriseal of Ohio Inc., (330) 669-2317 or www.grip-flex.com