This video will talk about a little problem we face within our organization that is a business valuation calculator. People are looking at tools and real estate like Zillow, or they go through the Kelly blue book of cars and think"Why don't we have a calculator for business valuations?
You've been doing this for a long time but the truth is we'd like to. Problem is it's hard. There are a few excellent baselines, for example earnings and revenue, and we can talk about guidelines and what they look like. What makes it difficult to achieve is that you can take two businesses that have the same revenue and earnings, and they are worth significantly different multiples. In reality, two, three X each other, barely even as close. And that's because of the intangibles.
There are a lot of things that go into the business of a company including intellectual propertyand defensibility software and more that create a more complex discussion 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 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 worth of your business, or how much your company is worth, why not give us a call toll free at Freedom Factory. We're looking forward to talking with you in the near future.
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 want to sell myour business. Now what? The first thing you'll need to take care of is to get your house ready for your company to sell. So go and obtain three or two years of tax-related tax reports.
And financials and put those together. Get them from your accountant and have the documents ready for. If you've not created an operating manual, this would be an ideal opportunity to create one. You know how your business is run, and you know how different departments work and when it comes time to sell your business, you'll wish to make it as simple for you to transfer the business to a new owner.
This value is likely to be reflected in the sales price. So go put your operations manual as well as new job descriptions together and make sure your home is in order. The final piece is finding out how to how to put your team together. Find a good broker and an appraiser. Determine the value your business has. Create a story, and then decide, okay, how are we going to take it to the market?
When will we take it to market? It's all about the tax situation currently. You know, how do I change my financials? What do I mean by that is really easy. They're going to, we're going to take you EBIDTA or your accountant could do the same thing, and we're going to translate it into the seller's discretionary cash flow, which is.
A fancy way of describing all the money that your, that your business creates as you file your tax returns. It's all about minimization, right? Tax evasion is not legal. Tax avoidance is extremely smart. So you're looking to spend as little tax as possible. Well, we need to translate that, it's from some of your non-cash expenses depreciation, for instance certain discretionary stuff and add that back in to maximize the value.
Flag all the value that your business generates to bring about a significant change. Finally, you should know what field are you planning to enter? How do we maximize your multiple? And there are ways to accomplish this. Think about the field you're working in. Find out, for instance, all your financials.
Create an operation 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. Find the best appraisers, and find the best brokers to help you prepare your business for sale, and if you need assistance with this contact us to us at Freedom Factory.
When is the right moment to sell my business?
This is an extremely important topic and when is the best time to sell your business? This is a little more art than it does science. It's basically an assessment of the things you've learned. We're outside. This is my backyard. It's in my mountain house , and it's a bit of my favorite place.
The first thing I'm going suggest to you is get a change of scenery. Get out of the office. Get out of the commute whether with your family or away. You must now find a place that you can visit, regardless of whether you want to fish or ski or go to the mountains or visit the beach or whatever, just go somewhere and change your location, and find a place where you're comfortable.
Think about your business. And I look at it and I think about it in three areas. The first is, am I here and am I in the right place? Are I actually in my business? Do I serve my business or is my business serving me? And I think it's too short to be living where you work for your company. Your business is your personal way to greater freedom and wealth.
And the way I define freedom is fairly straightforward - it's about doing what you want, when you want, as often as you'd like, with whom you want. And if you're enjoying your work and think, God, this is amazingand I'm there and I'm clear and I'm doing exactly what I'm supposed to do, which is the way I think about selling businesses for other entrepreneurs This is awesome.
The time is not right to sell your company. If you're not sure about that, I'd take a second look, and I would look at the situation and ask: do I have the right idea? Are I able to see clearly? idea of where I am going?
I'm going to take my business in the next one, two, three, or maybe up to five? What should I do to get over it and feel great, and feel like I've succeeded in what I've done? Now, if your business is growing at 40% per an year, or 50 percent per year, then you've probably got a clear vision. You're probably executing really well and you're probably feeling that you're in the flow. However, if you've been growing by 5% in the past five years, well that's a little bit more challenging, and maybe you can find someone who does it better than you.
Whenever my business is expanding at 5percent, I'm considering to sell. I'm saying, okay, I need an operator. It's more of a strategic person. And how do we focus on really making something amazing, where you're focused and purposeful however, your growth rate will be an important indicator of this.
And the final thing is that you've accomplished what you were born to do when you started your business. When I first began my business brokerage business, i decided to change the way that entrepreneurs buy and sell their businesses. I've founded three of the largest brokerages. I've hired the third one, purchased them to gain the right people, and I've created a more efficient market. This is the goal I set out to accomplish when I arrived here.
If you were to leave your current company and thought 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. Then I re-read it and I say I'm okay, is my business serving me. Do I feel clear and focused every day?
Do I have anything left to accomplish and do I have new ideas to implement the idea? These are the questions which will help you figure it out. It's an unreliable science, but overall it's really an exercise in gut-check. Do you agree? Are you convinced that it's time to sell your company?
If I'm thinking about selling it the item, it's usually six months too late. If you have additional questions about this or any other topic we would consider it our pleasure to assist you 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 Ty Tysdal will help you to prepare your business for sale.
Call Freedom Factory for a free business valuation
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