This video will talk about a little issue we're facing in our company that is a business valuation calculator. Many people look at real estate and tools such as Zillow or take a look at Kelly blue book of automobiles and ask"Why don't you have a calculator for business valuations?
You've been doing this for so long and, in reality, we'd love to. Problem is it's hard. There are a few very good benchmarks, such as revenue and earnings and we can discuss guidelines and how they will look like. What makes it so hard to do is you can take two businesses that have the same revenue and earnings, and they are worth vastly different multiples. It's like two, three times the other, and they're barely even far apart. That's due to intangibles.
There are a lot of things that go into the business of a company - intellectual propertyand defensibility software and more that create an even more complicated discussion that just asking what's your income and how much are you worth? that hypothetically. We're currently working on the issue. It's probably a little late to discuss the issue, but we're currently working with an amazing company to resolve this issue, and we'll have a solution soon. But in the interim, if you have any queries about how do you improve the value of your business or even what your business is worth, then why don't you give us a call by calling Freedom Factory. We're looking forward speaking with you in the near future.
How to prepare my business to sell
Many entrepreneurs aren't sure of what they should do to prepare their company to sell. So you have decided you'd like to sell your business. Now what? The first thing you need to do is to get your house organized to get your business for selling. Therefore, you should take two or three years worth of tax-related tax documents.
Also, financials and put them together. Take them to your accountant and get them ready to go. If you've not made an operational manual, now is a great moment to start. You're familiar with how your company operates, and you understand the ways that different departments interact and when it comes time to are selling your company, you would like ensure that it is as simple as possible to transition to an owner who is new.
This value is likely to be taken into consideration in the sale price. So , get your operations manual as well as new job descriptions and get your house in order. The third step is to find, you know, how to put your team together. Find a reputable broker and an appraiser. Find out the value of your business. Create a story and figure out what you want to accomplish. we going to get the business to market?
When will we take it to market? What's the current tax environment. How do I change my financials? What I say by that is straightforward. They're going to, we're going to use you 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 describing all the money that your business earns during the process of filing tax returns. It's a game to reduce, right? Tax evasion is illegal. Tax avoidance is very smart. You're trying to pay as little tax as possible. Well, we need to translate that, you know, from the non-cash costs you incur such as depreciation the discretionary expenses and then add it back in to maximize the value.
Make sure you highlight the value your business creates which will 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 accomplish this. Consider the kind of field you're working in. Figure out, you know, all your financials.
Create an operation manual to help make the transition as simple as is possible. The whole process, and everything it is going to be, will be easier when you put the right team. Find the best appraisers, and find the best brokers to assist you in preparing your company for selling, and if you need any assistance, give us a call here at Freedom Factory.
When is the right moment to sell my company?
This is a crucial topic and when is the right time to market your business? This one is a bit more art than it does science. In the end, it's an examination of what you know. We're outside. This is the backyard of my mountain home and is a part of my home.
The first thing I'm going to suggest is to get a change of scenery. Leave the workplace. Escape the daily grind or with your loved ones or on vacation. You must now find a area where you can visit, regardless of whether you want to fish or ski , or go to the mountains or go to the beach and whatever it is, just go somewhere and change your location, and go to a place that you feel really comfortable.
Then think of your company. Then I take a look and I consider it in three ways. First, am I really here and am I in the right place? Are I actually in my business? Am I serving my business or is my business serving me? In my opinion, your life is too short to be living where you serve your business. Your company is your personal road to greater freedom and money.
And the way I define freedom is pretty simple - it's doing what you want, at the time you desire, and as often as you'd like, with whom you want. And if you're enjoying what you're doing and you think, God, this is amazingand I'm in the right place and am focused and I'm doing what I'm supposed and that's how I think about selling businesses to entrepreneurs in general and entrepreneurs, then that's great.
The time is not right to sell your company. If you're not sure about that, I would think a little bit harder and then take a deep breath and ask, do I have the right idea? Have I got a crystal clear vision about where I want to go?
I'm going to take my business on in the next one, two, three, or maybe or even in five years? What can I do in order to resolve it , and also feel fantastic and confident that I've accomplished what I've accomplished? Now, if your business is growing at 40% per one year or even 50% a year, you probably have a clear vision. You're probably doing really well and you probably feel that you're in the flow. However, if you've been growing at 5% for the past five years, well that's a little bit more difficult, and perhaps somebody else can do it better than you.
Whenever my business is expanding at 5%, I'm looking to sell. I'm saying, okay, I'm looking for an operator. I'm more of a strategic person. What can we do to focus on creating something that's extraordinary, that is on point and on purpose However, the rate of growth is a good indicator of the fact that.
The last thing to remember is that you've accomplished what you were born 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 that entrepreneurs purchase and sell businesses. I've started three of the biggest brokerages. I hired, one of them, or purchased them to gain the right people, and I've created a more efficient market. This is what I set out to achieve when I moved here.
If you were to leave your current job and thought about this for a while, would you feel resolved or do you feel that you didn't finish the job you came there to do. When I look back on 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 new ideas for implementing that vision? These are the questions that walk you through it. It's a little bit of an imprecise science, but in the end, it's an assessment of your gut. Which are your thoughts? Are you convinced that it's time to sell your company?
Since, if I ever think about selling the business, it's about six months too in the past. If you have other questions on this or any other topic that you need help with, it's our pleasure to assist here at Freedom Factory. Give us a ring.
Go to https://freedomfactory.com/sell-my-business/ 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.
Call Freedom Factory for a free business valuation
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