I want to talk about a little pain point that we have within our organization that is a business valuation calculator. Many people look at real estate and tools like Zillow or take a look at Kelly blue book on automobiles and ask"Why don't you have an online business valuation calculator?
It's been going on for so long, and the reality is we'd like to. The problem is that it's difficult. There are some very good benchmarks, such as earnings and revenue, and we can discuss guidelines and what they look like but what makes us so hard to do is you can take two businesses with the same revenue, same earnings, but with vastly different multiples. In reality, two, three X the other, and they're barely even far apart. And that's because of the intangibles.
There's a myriad of aspects to the business of a company such as Intellectual property rights, defensibility tools, and so on that really make it an even more complicated discussion rather than simply, Hey, how much are you making and you're worth five times this hypothetically. We're now working on the issue. It's probably a little late to discuss it, but we're working with an incredible business to address this issue and we're going to come up with a solution shortly. In the meantime If you have any concerns about how do you improve the value of your business or even what your business is worth, why don't you give us a call by calling Freedom Factory. We're looking forward speaking with you shortly.
How can I prepare my company to sell
Entrepreneurs often aren't sure how to prepare their business to sell. If you've made the decision that you'd like to sell your business. What do you do now? The first thing you'll need to take care of is to get your house in order to prepare your business to sell. Therefore, you should get three or two years of tax-related tax reports.
Financials and then put them together. Find them from your accountant and get the documents ready for. Second, if you haven't created an operating manual, now is an ideal opportunity to create one. You're aware of how your business operates, and you understand how the different departments interrelate and when it comes time to sell your business, we would like to make it as simple as possible to transition to an owner who is new.
And that value is going be included in the price of sale. So , get your operations manual as well as new job descriptions and make sure your home is in order. And the third piece is find, you know, how to put your team together. Find a good appraiser and broker. Find out what your business is worth. Create a story and then figure out, okay, how are we going to bring the business to market?
When do we plan to introduce it to the market? It's all about the current tax environment. How can I recast my financials? What do I refer to as simple. They're going to, we're going to use your EBIDTA or your accountant's ability to do the same thing and then translate it into the seller's discretionary cash flow, which is.
A fancy way of saying all the money that your, that your business creates as you file your tax returns. It's all about minimization isn't it? Tax evasion is a crime. Tax avoidance is a smart strategy. It's why you're trying to pay as low a tax as you can. We have to translate that you know, from some of your non-cash expenses such as depreciation the extra-ordinary expenses, and then put it back to increase the value accurately.
Highlight the value your business generates, and that's gonna make a big difference. Finally, you should know, what industry are you going to be in? How do we maximize your multiple? And there are methods to be able to do that. Consider the kind of sector you're in. Determine, you're aware, all your financials.
Make an operational manual to help make the transition as simple as possible. The whole process, and everything it will be, is going to help you in forming the best team together. Find the right appraisers, locate the right brokers to help you prepare your company for selling If you require any assistance get in touch with us to us toll free at Freedom Factory.
What is the best time to sell my business
This is a really important topic and when is the best time to sell your company? This question has a bit more of an art than science. And ultimately it's kind of a gut check of your knowledge. We're outside. This is my backyard. mountain house , and it's a bit of my favorite place.
The first thing I'll suggest to you is get an escape. Get out of the workplace. Escape the daily grind or with your loved ones or on vacation. Now figure out some location where you could visit, regardless of whether you want to fish or ski , or visit the mountains or go to the beach and whatever simply go there and change your destination and go to a place that you feel really comfortable.
And then think about your business. Then I take a look and I consider it in three ways. First, am I really here and am I in the right place? Am I really into my business? Am I serving my business or does my business serve me? And I think your life is too short to live where you work for your company. Your company is your personal road to greater freedom and wealth.
The way I think of freedom is pretty easy - doing what you want, at the time you want, as often as you'd like and with whom you'd like. And if you love your work and consider, God, this is amazing, and I am in the right place and am in the right place and doing exactly what I'm supposed in the way I view selling businesses to entrepreneurs in general This is awesome.
The time is not right to sell your company. If you're unsure about that, I'd consider a bit more, and I would take a deep breath and ask, do I have the right perspective? Have I got a crystal clear view of where I am going?
I'm going to take my business in the next two, three, or maybe or even in five years? What do I need to accomplish to overcome it , and also feel fantastic and confident that I've achieved what I've done? Now, if your business is growing by 40% per year or 50% per year, then you've probably got an enlightened view. You're probably executing really well and you probably feel at ease. On the other hand, if you've been growing by 5% in the past five years, well it's more challenging, and maybe somebody else can do it better than you.
If my company is expanding at 5percent, I'm considering to sell. I'm saying, okay, I'm looking for an operator. My style is more of a strategist. How do we concentrate on creating something that is amazing, where you're on point and on purpose However, the rate of growth will be a big indicator of that.
The last thing to remember is that you've accomplished what you were born to accomplish if, were to start your own business. When I first entered the business brokerage business, i knew I wanted to change the way that entrepreneurs buy and sell businesses. I've started three of the largest brokerages. I've hired the third one, purchased them to gain the people, and I've really made it a much better market. And that's what I set out to achieve when I moved here.
However, if you quit your current business and think about this for a second, would you feel resolved or would you feel as if you didn't complete the task you set out to accomplish. So I looked back at the situation and thought, okay does my company serve me. Do I feel clear and focused each day?
Do I have anything I need to accomplish and do I have new ideas to really implement that vision? These are the things that will guide you through it. It's a little bit of an unreliable science, but in the end, it's a gut check. What do you think? Do you think it's the right time to sell your company?
Because usually if I think about selling my business in six months, it's too in the past. So if you have any other questions on this or anything else we would consider it our pleasure to assist us here in the Freedom Factory. Give us a call
Click here https://freedomfactory.com/market-valuation/ will give you a free business valuation to find out the worth of your business. Denver business broker Tyler Tysdal will help you to prepare your business for sale.
Call Freedom Factory for a free business valuation
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