Let's talk about a little pain point that we have within our organization which is a valuation calculator. People look at tools and real estate such as Zillow, or they look at Kelly blue book on automobiles and ask, why don't you have a calculator for business valuations?
It's been going on for so long but the truth is we'd love to. Problem is it's hard. And so there are some really good baselines, like earnings and revenue. We could discuss guidelines and what they look like but what makes us difficult to achieve is that you can have two businesses, same revenue, same earnings, and they are worth significantly different multiples. Literally two, three X each other, barely even far apart. This is due to intangibles.
There's a myriad of aspects to the business of a company such as intellectual property, defensibility software that create an even more complicated discussion that just asking what's your income and are you worth five times the amount you're imagining. We're currently working on this issue. It's probably too late to discuss it, but we're working with an incredible company to resolve this issue, and we're going to have a solution soon. But in the interim If you have any concerns about how you can improve the worth of your business, or even what your business is worth, why not contact us at Freedom Factory. We look forward to speaking with you soon.
How to prepare my business to sell
Entrepreneurs often aren't sure how to prepare their business to sell. So you have decided you'd like to sell your business. Now what? First, what you must do is to get your house in order to prepare your business for selling. Also, get two or three years of tax of tax records.
And financials and put those together. Take them to your accountant and get the documents ready for. If you've not put together an operations manual, now is a great time to do so. You're aware of how your business operates, and you understand the ways that different departments interact however, when you decide to sell your business, you wish to make it as easy for you to transfer the business to an owner who is new.
The value of that will to be reflected in the price of sale. So , get your operations manual and new job descriptions together , and get your house in order. The third step is to find, you know, put your team together. Find a reputable broker and an appraiser. Determine the value of your business. Create a story, and then decide how we going to get the business to market?
When do we plan to introduce it to the market? It's all about the current tax climate. How do I change my financials? What do I refer to as easy. They're going to, we're going to use the information from your EBIDTA or your accountant's ability to do similar things, and we're going to translate it into the seller's discretionary cash flow. That is.
A fancy way of describing all the money company earns when you do your tax returns. It's a game of minimization, right? Tax evasion is illegal. Tax avoidance is very smart. It's why you're trying to pay as low a tax as possible. We have to translate that you know, from certain of your other expenses such as depreciation certain extra-ordinary expenses, and then put it back to increase the value accurately.
Flag all the value that your company creates to make a big difference. And finally, you know which industry you planning to enter? How do we maximize your multiple? There are ways to achieve this. Think about the sector you're in. Find out, for instance all your financials.
Put an operations manual together to help make the transition as simple as you can. All of this will be can be a huge help in forming the best team together. Find the best appraisers, locate the right brokers to help you prepare your company for selling If you require any assistance get in touch with us here toll free at Freedom Factory.
Is it the right time to sell my business
This is an extremely important issue and when is the right time to sell your company? This one is a bit more art than it does science. And ultimately it's kind of an examination of the things you've learned. We're outside. This is my backyard. mountain house and is kind of my happy place.
The first thing I'm going suggest is to get some fresh air. Take a break from the workplace. Get out of the commute or with your family or away. You must now find a location where you could go, no matter if you like to fish or ski or go to the mountains , or visit the beach or whatever you like, go to a place and switch your place of residence and find a place where you are comfortable.
And then think about your business. Then I take a look and I consider it in three questions. First, 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? And I think your life is too short to live where you work for your company. Your business is your personal vehicle for more freedom and money.
What I mean by freedom is pretty easy - doing what you want, at the time you want, as often as you want, with whom you want. And if you love what you're doing and you feel like, God, this is amazing, and I am there and I'm focused and I'm doing what I'm supposed to do, which is the way I look at selling businesses for entrepreneurs in general and entrepreneurs, then that's great.
It's not the time to sell your business. If you're unsure about this, I'd consider a bit more, and I would take a deep breath and ask, is my business positioned with the proper vision? Are I able to see clearly? vision on where
I'm thinking of taking my business in the next two, three, or maybe or even in five years? What can I do to get over it and feel great, and feel like I've accomplished what I've accomplished? Now, if your business is growing by 40% per year or 50% a year, you're probably having an enlightened view. You're probably doing really well and you probably feel at ease. However If you've been growing at 5% over the last five years, well that's a little bit more challenging, and maybe somebody else can do it better than you.
When my business is expanding at five percent, I'm planning to sell. I'm thinking, okay, I need an operator. It's more of a strategic guy. How do we concentrate on really creating something that is extraordinary, that is focused and purposeful However, the rate of growth is a good indicator of this.
The last thing to remember is, you have done what you were born to do when you started your business, when I began my business brokerage business, i decided to change the way that entrepreneurs buy and sell businesses. I've founded three of the largest brokerages. I've hired at least one I've bought them to attract the staff, and have transformed it into a more efficient market. That's exactly the goal I set out to do when I came to this place.
However, if you quit your current job and thought about this for a second do you feel satisfied or would you feel as if you didn't complete the task you were there to complete. When I look back on it and said, okay does my company serve me. Am I clear and engaged every day?
Do I have anything left to do and do I have a fresh set of ideas for implementing that idea? These are the factors which will help you figure it out. It's a little bit of an imprecise science, but all in all, it's an exercise in gut-check. Do you agree? Do you think it's the right time to sell your company?
If I'm thinking about selling my business, it's about six months too late. So if you have any other questions on this or anything else that you need help with, it's our privilege to help with your questions here at Freedom Factory. Give us a call
Click here 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.
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