CHAPTER 1

Cracking the Code: What’s It Worth?

The White Rabbit put on his spectacles. ‘Where shall I begin, please your Majesty?’ he asked.

‘Begin at the beginning,’ the King said gravely, ‘and go on till you come to the end: then stop.’

—Lewis Carroll, Alice’s Adventures in Wonderland, 1865

INTRODUCTION

As the King does for the White Rabbit, we find ourselves in the position of advising about where, and how, to begin a story—in our case, about where and how to begin the process of valuing a business. The valuation discussion does not only come up in the context of buying and selling a business. An owner should understand the worth of his or her business when borrowing money (particularly when a portion must be offered as collateral); when designing ...

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