Let's talk about a little issue we're facing within our organization that is a business valuation calculator. Many people look at tools and real estate like Zillow, or they take a look at Kelly blue book on cars and think"Why don't we have an online business valuation calculator?
It's been going on for so long but the truth is we'd love to. Problem is it's hard. There are some excellent baselines, for example earnings and revenue. We can talk about guidelines and what they look like. But what makes it so hard to do is it is possible to take two companies, same revenue, same earnings, but with hugely different amounts. In reality, two, three X the other, and they're barely even as close. That's due to intangibles.
There's a myriad of aspects to a business including intellectual propertyand defensibility software and more that really make it an extremely complex issue rather than simply, Hey, what's your income and how much are you worth? that hypothetically. We're now working on the issue. It's probably a little early to talk about the issue, but we're currently working with an amazing company to resolve this issue, and we'll find a solution in the near future. But in the interim If you have any concerns regarding how to increase the worth of your business, or how much your company is worth, then why don't you contact us at Freedom Factory. We're looking forward speaking with you in the near future.
How do I prepare my business to be able to sell?
Many entrepreneurs aren't sure of how to prepare their businesses to sell. So you have decided you'd like to sell your business. What next? Well, the first thing you need to do is get your home ready for your business to sell. Also, get two or three years of tax of tax documents.
And financials and put those together. Find them from your accountant and get the documents ready for. In the second, if you've never created an operating manual, this would be the perfect moment to start. You know how your business works, you know how different departments work, but when you are selling your company, you would like to make it as easy for you to transfer the business to a new owner.
The value of that will be included in the sale price. So go put your operations manual and job descriptions together , and put your house in order. And the third piece is finding out how to how to put your team together. Find a great broker and an appraiser. Get an idea of the value of your business. Begin to write the story and then figure out how we going to bring it to the market?
When will we launch it? You know, what's the current tax environment. You know, how do I change my financials? What do I mean by that is really straightforward. We're going to look at the information from your EBIDTA or your accountant can do similar things and then translate it into the seller's discretionary cash flow, that is.
A fancy way of saying all the money that your, that your business creates as you file your tax returns. It's a game to reduce, right? Tax evasion is illegal. Tax avoidance is very smart. So you're looking to spend as little tax as possible. We need to translate that, it's from certain of your other expenses, depreciation, you know, some of your extra-ordinary expenses, and then put it back to increase the value accurately.
Highlight the value your company creates, and that's gonna have a major impact. Finally, you should know what field are you likely to be in? How do we maximize your multiple? And there are ways to achieve this. Think about the sector you're in. Figure out, you know the financials of your business.
Make an operational manual to ensure that the transition is as smooth as you can. The whole process, and everything it is going to be, can be a huge help when you put the right team together. Find the most qualified appraisers, find the right brokers to help you prepare your business to sell If you require any assistance get in touch with us here by calling Freedom Factory.
What is the best moment to sell my company?
This is a really important issue and when is the best time to sell your company? This question has a bit more art than it does science. In the end, it's an assessment of your knowledge. We're outside. This is the backyard of my mountain house and is kind of my favorite place.
The first thing I'm going to suggest to you is get an escape. Take a break from the workplace. Take a break from the commute or with your family or out. You must now find a place that you can go, no matter if you like to fish, ski or go to the mountains or go to the beach and whatever else simply go there and change your location, and find a place where you are comfortable.
Then think on your own business. And I look at it and I analyze it using three questions. The first is, am I here and do I have a clear understanding? Are I actually in my business? Am I serving my business or does my business serve me? It seems to me that your life is too short to be living where you serve your business. Your business is your personal vehicle for more freedom and wealth.
What I mean by freedom is pretty easy - doing what you want, when you want, as often as you'd like and with whom you'd like. And if you love what you're doing and you feel like, God, this is amazing, and I am in the right place and am clear and I'm doing exactly what I'm supposed to do and that's how I think about selling businesses to fellow entrepreneurs, then that's awesome.
And it's not time to sell your company. If you're unsure about that, I would think a little bit harder and then take a deep breath and ask, Do I possess the correct perspective? Have I got a crystal clear view on where
I'm thinking of taking my business over the next two, three, maybe even five years? What can I do to get over the issue and feel good, and feel like I've accomplished what I've accomplished? If your company is growing 40% a one year or even 50% a year, you probably have a clear vision. You're probably executing really well and you probably feel that you're in the flow. On the other hand If you've been growing at 5% for the past five years, that's a little bit more challenging and someone else is able to do it better than you.
If my company is growing at 5%, I'm looking to sell. I'm saying, okay, I need an operator. It's more of a strategic guy. And how do we focus on really creating something that's amazing, where you're right on target and focused, but your growth rate is a good indicator of the fact that.
The final point is, you've done what you set out to do were to start your own business. When I first came to the business brokerage business, i knew I wanted to change the way entrepreneurs purchase and sell their businesses. I've created three of the largest brokerages. I've either hired at least one I've acquired them to get the people, and I've created a effective market. This is what I set out to do when I came to this place.
But if you left your current business and think about this for a second and then decide to leave, would you feel happy or would you feel as if you didn't finish the job you came there to do. So I looked back at it and said, okay, is my business serving me. Do I feel clear and focused every day?
Do I have any remaining tasks to do and do I have fresh ideas to implement the vision? These are the factors which will help you figure it out. It's a bit of an unreliable science, but in the end, it's a gut check. What do you think? Are you convinced that it's time to sell your company?
Since, if I ever think about selling my business in six months, it's too in the past. If you have other questions on this or any other topic, it would be our pleasure to assist us here in the Freedom Factory. We're waiting for you to give us a call
Click here https://freedomfactory.com/why-freedom-factory/ will give you a free business valuation to find out the worth of your business. Denver business broker Ty Tysdal will help you to prepare your business for sale.
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