This podcast will discuss a small issue we're facing in our business, and it's a business valuation calculator. Many people look at real estate and tools such as Zillow, or they go through the Kelly blue book of cars and they say, why don't you have a business valuation calculator?
You've been doing this for so long, and the reality is we'd love to. But it's not easy. So there are some very good benchmarks, such as earnings and revenue. We can talk about guidelines and what that looks like. But what makes it so difficult is you can have two businesses with the same revenue, same earnings, worth hugely different amounts. It's like two, three times each other, almost not even far apart. That's due to intangibles.
There's a myriad of aspects to the business of a company such as intellectual propertyand defensibility software and more that create an even more complicated discussion rather than simply, Hey, how much are you making and are you worth five times that hypothetically. We're now working on it. It's probably a little far too early to speak about it, but we're working with an incredible business to address this issue and we'll have a solution soon. In the meantime If you have any queries regarding how to improve the value of your business or what your business is worth, why don't you contact us by calling Freedom Factory. We look forward to speaking with you in the near future.
How can I prepare my company to sell?
Entrepreneurs are often confused about what they should do to prepare their company to sell. So you have decided you'd like to sell your business. Now what? Well, the first thing you need to do is to get your house ready for your business for selling. Therefore, you should obtain three or two years of tax of tax documents.
Also, financials and put them together. Take them to your accountant and get the documents ready for. If you've not put together an operations manual, now is the perfect opportunity to create one. You know how your business operates, and you understand how the different departments interrelate and when it comes time to decide to sell the business you'll would like ensure that it is as simple as possible for the transition to an owner who is new.
And that value is going to be reflected in the sales price. Therefore, put your operation manual as well as new job descriptions together and make sure your home is in order. And the third piece is finding out how to put your team together. Find a great appraiser and broker. Determine the value of your business. Begin to write the story and figure out what you want to accomplish. we going to take it to market?
When are we going to take it to market? It's all about the current tax climate. How do I change my financials? What I refer to as straightforward. We're going to take you EBIDTA or your accountant could do similar things and then translate it into seller's discretionary cash flow, which is.
A fancy way of saying all the money, that your business creates when you do your tax returns. It's a game to reduce, right? Tax evasion is illegal. Tax avoidance is a smart strategy. So you're seeking to be as tax-efficient and pay as little tax as possible. Well, we have to translate that it's from certain of your other expenses, depreciation, you know the discretionary expenses and then add it back to increase the value.
Highlight the value your business generates to bring about a significant change. And finally, you know what field are you planning to enter? How do we maximize your multiple? And there are ways to accomplish that. But think about what sector you're in. Determine, you're aware, all your financials.
Make an operational manual to make the transition as easy as possible. All of this will be will be easier when you put the right team together. Find the right appraisers, and find the best brokers to help you prepare your business to sell and, if you require any help with this contact us here at Freedom Factory.
When is the right moment to sell my business?
This is an extremely important issue and when is the right time to market your business? This question has a bit more of an art than science. In the end, it's an examination of the things you've learned. We're outside. This is my backyard. It's in my mountain home and is a part of my favorite place.
The first thing I'll suggest is to get an escape. Get out of the office. Get out of the commute whether with your family or out. You must now find a location where you could go, whether you love to fish or ski , or go to the mountains or go to the beach , and whatever you like, go to a place and change your location, and find a place where you are comfortable.
Think about your business. Then I take a look and then consider it in three areas. First, am I really here and am I in the right place? Are I actually in my business? Are I doing my best to serve my company or is my business serving me? In my opinion, your life is too short to live in a place where you work for your company. Your company is your personal road to greater freedom and wealth.
What I mean by freedom is pretty easy - doing what you want, when you want, as often as you'd like, with whom you want. If you are in love with what you're doing and you think, God, this is amazingand I'm in the right place and am clear and I'm doing exactly what I'm supposed in the way I look at selling my businesses to entrepreneurs in general This is awesome.
The time is not right to sell your business. If you're not sure about that, I'd take a second look and then I'd look at the situation and ask: Do I possess the correct idea? Do I have a clear vision of where I am going?
I'm planning to expand my business in the next one, two, three, maybe or even in five years? What should I accomplish to overcome it , and also feel fantastic and confident that I've achieved what I've done? Now, if your business is growing at 40% per an year, or 50 percent per year, you probably have an enlightened view. You're probably doing really well and you're probably feeling that you're in the flow. On the other hand, if you've been growing by 5% in the past five years, well it's slightly more challenging, and maybe someone else is able to do it better than you.
When my business 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 strategic person. What can we do to focus on making something amazing, where you're focused and purposeful However, the rate of growth is a good indicator of that.
And the final thing is, you've done what you were born to do if you, when you started your company, when I came to the business brokerage business, i was aware that I wanted to alter the way that entrepreneurs purchase and sell businesses. I've started three of the largest brokerages. I've hired the third one, I've bought them to attract the people, and I've really made it a much effective market. That's exactly what I set out to do when I came to this place.
However, if you quit your current job and thought about it for a moment do you feel satisfied or would you feel as if you didn't finish the job you were there to complete. Then I re-read the situation and thought that's fine I'm satisfied with how my business is serving me. Am I clear and engaged each day?
Do I have anything left to complete and do have a fresh set of ideas to implement the idea? These are the factors that walk you through it. It's a little bit of an unreliable science, but all in all, it's a gut check. Do you agree? Are you convinced that it's time to sell your business?
Because usually if I think about selling the business, it's about six months too late. So if you have any other questions on this or something else we would consider it our pleasure to assist us here in the Freedom Factory. So just give us a call
Visit 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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