Let's discuss a small issue we're facing within our organization which is a valuation calculator. People look at real estate and tools like Zillow or take a look at Kelly blue book on cars and think, why don't you have a calculator for business valuations?
We've seen you doing it for so long and, in reality, we'd love to. The problem is that it's difficult. So there are some really good baselines, like revenue and earnings and we can discuss guidelines and what that looks like. What makes it so difficult is you can have two businesses, same revenue, same earnings, worth significantly different multiples. It's like two, three times the other, and they're barely even close. And that's because of the intangibles.
There's a myriad of aspects to the business of a company such as intellectual propertyand defensibility software, and so on that create an even more complicated discussion rather than simply, Hey, what's your income and you're worth five times that hypothetically. We're now working on this issue. It's probably too late to discuss the issue, but we're currently working with an incredible company to address this issue and will have a solution soon. In the meantime If you have any concerns about how do you maximize the worth of your business, or even what your business is worth, why not contact us by calling Freedom Factory. We're looking forward speaking with you shortly.
How do I prepare my business to be able to sell?
Entrepreneurs often aren't sure how to prepare their businesses to sell. So you have decided you'd like to sell your business. What next? First, what you'll need to take care of is to put your house ready for your company to sell. Therefore, you should obtain two or three years worth of tax of tax documents.
Financials and then put them together. Find them from your accountant and get them ready to go. Second, if you haven't created an operating manual, this would be a great moment to start. You're aware of how your business works, you know how different departments work however, when you decide to decide to sell the business we would like for it to be as easy as possible for the transition to the new owner.
This value is likely be included in the sales price. So , get your operations manual and job descriptions together , and put your house in order. The final piece is discover, well, how to put your team together. Find a great appraiser and broker. Find out what your business is worth. Start to craft the story and then figure out, okay, how are we going to take the business to market?
When are we going to introduce it to the market? It's all about the tax situation currently. What do I change my financials? And what I say by that is simple. They're going to, we're going to look at you EBIDTA or your accountant's ability to do the same thing and then translate it into the seller's discretionary cash flow, that is.
A fancy way of describing all the money, that your business creates during the process of filing tax returns. It's all about minimization isn't it? Tax evasion is illegal. Tax avoidance is extremely smart. You're looking to spend as little tax as possible. We have to translate that you know, from certain of your other expenses such as depreciation the discretionary expenses and then add it into the equation to maximize the value.
Flag all the value that your business creates to have a major impact. Finally, you should know what field are you going to be in? How do we maximize your multiple? And there are ways to accomplish that. Consider the kind of industry you're in. Determine, you're aware the financials of your business.
Create an operation manual to help make the transition as simple as is possible. And all of this will be, will be easier by putting together the best team. Find the most qualified appraisers, locate the right brokers to help you prepare your company for selling If you require any help with this, give us a call here by calling Freedom Factory.
When is the right time 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. In the end, it's a gut check of your knowledge. We're outside. This is the backyard of my mountain house and is kind of my happy place.
The first thing I'll suggest is to get a change of scenery. Leave the office. Escape the daily grind, either with your family or away. Find a place that 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 are comfortable.
Think of your company. And I look at it and I analyze it using three areas. The first is, am I here and do I have a clear understanding? Am I really into my business? Do I serve my business or does my business serve me? In my opinion, 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.
The way I think of freedom is quite simple - it's doing what you want, at the time you want, as often as you'd like, with whom you want. And if you're enjoying what you're doing and you consider, God, this is amazing, and I am here and I am focused and I'm doing what I'm supposed, which is the way I think about selling my businesses to other entrepreneurs and entrepreneurs, then that's great.
The time is not right to sell your business. If you're unsure about that, I'd take a second look, and I would take a deep breath and ask, do I have the right perspective? Are I able to see clearly? view on where
I'm going to take my business on in the next three, perhaps up to five? What do I need to do to get over the issue and feel good and feel that I've achieved what I've done? If your company is growing by 40% per year or 50% a year, you're probably having an enlightened view. It's likely that you're doing a great job and are probably at ease. On the other hand, if you've been growing at 5% for the past five years, then it's 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 thinking, okay, I'm in need of an operator. It's more of a strategist. How do we concentrate on making something amazing, where you're focused and purposeful However, the rate of growth will be a big indicator of the fact that.
The last thing to remember is that you've accomplished what you came to accomplish if, when you started your business. When I first entered the business brokerage business, i was aware that I wanted to alter the way that entrepreneurs purchase and sell businesses. I've founded three of the biggest brokerages. I hired, one of them, or I've bought them to attract the staff, and have transformed it into a better market. This is what I set out to accomplish when I arrived here.
But if you left your current company and thought about this for a second do you feel satisfied or would you feel like you didn't complete the task you came there to do. So I looked back at it and I say, okay I'm satisfied with how my business is serving me. Am I clear and engaged each day?
Do I have anything left to accomplish and do I have fresh ideas to really implement that idea? These are the things which will help you figure it out. It's a little bit of an unreliable science, but all in all, it's a gut check. Do you agree? Do you think it's time to sell your business?
Since, if I ever think about selling my business the item, it's usually six months too in the past. If you have other questions on this or something else, it would be our privilege to help with your questions here at Freedom Factory. We're waiting for you to give us a ring.
Follow this link https://freedomfactory.com/ 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
Freedom Factory
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Phone: (844-629-8258)
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