This podcast will talk about a little issue we're facing in our business that is a business valuation calculator. People look at real estate and tools like Zillow or go through the Kelly blue book of cars and they say"Why don't you have an online business valuation calculator?
You've been doing this for a long time, and the reality is we'd love to. But it's not easy. There are some excellent baselines, for example earnings and revenue. We can talk about guidelines and what that looks like. But what makes it difficult to achieve is that you can have two businesses that have the same revenue and earnings, but with vastly different multiples. It's like two, three times one another, and almost not even close. And that's because of the intangibles.
There's so many things to the business of a company including intellectual propertyand defensibility software that can create an even more complicated discussion that just asking what's your income and are you worth five times that hypothetically. We're now working on it. It's probably a little far too early to speak about the issue, but we're currently working with an incredible company to solve this problem and we're going to have a solution soon. But in the interim should you have any queries regarding how to increase the value of your business or how much your company is worth, why not contact us at 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. You've decided that you want to sell myour business. Now what? The first thing you must do is to get your house ready for your business for selling. Therefore, you should obtain three or two years of tax-related tax documents.
And financials and put those together. Find them from your accountant and get ready for. Second, if you haven't made an operational manual, now is the perfect time to do so. You're aware of how your business is run, and you know the ways that different departments interact however, when you decide to are selling your company, you want ensure that it is as effortless as possible to transition to the new owner.
The value of that will to be reflected in the sale price. So , get your operations manual as well as new job descriptions together , and get your house in order. And the third piece is finding out how to how to put your team together. Find a reputable appraiser and broker. Determine what your business is worth. Begin to write the story and figure out, okay, how are we going to take it to the market?
When will we take it to market? It's all about the current tax environment. How do I change my financials? And what I refer to as simple. They're going to, we're going to take 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 to describe all the money, that your business creates during the process of filing tax returns. It's a game to reduce isn't it? Tax evasion is illegal. Tax avoidance is very smart. It's why you're trying to pay as low a tax as possible. We must translate that, it's from some of your non-cash expenses such as depreciation the discretionary expenses and then add it into the equation to maximize the value accurately.
Make sure you highlight the value your company creates which will bring about a significant change. Also, do you know, what industry are you going to be in? How do we maximize your multiple? There are ways to accomplish that. But think about what industry you're in. Determine, you're aware the financials of your business.
Make an operational manual to make the transition as easy as is possible. And all of this will be will be easier when you put the right team together. Find the right appraisers, and find the best brokers to assist you in preparing your business for sale and, if you require assistance with this, give us a call here at Freedom Factory.
Is it the right time to sell my business
This is a crucial topic and when is the right time to sell your company? This question has a bit more of an art than science. And ultimately it's kind of an examination 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 home.
The first thing I'll suggest is to get some fresh air. Get out of the workplace. Get out of the commute or with your loved ones or on vacation. Find a area where you can go, whether you love to fish or ski or go to the mountains , or visit the beach or whatever it is you like, go to a place and switch your place of residence and find a place where you are comfortable.
And then think of your company. And I look at it and analyze it using three ways. The first is, am I here and am I in the right place? Do I truly believe in my business? Do I serve my business or does my business serve me? It seems to me that life is too short to live in a place where you serve your business. Your business is your personal way for more freedom and money.
The way I think of freedom is fairly simple - it's doing what you want, at the time you need, whenever you'd like, with whom you want. If you are in love with 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 think about selling businesses to entrepreneurs in general, then that's awesome.
And it's not time to sell your company. If you're not certain about this, I'd think a little bit harder and then I'd look at the situation and ask: do I have the right vision? Have I got a crystal clear idea about where I want to go?
I'm going to take my business in the next one, three, perhaps even five years? What should I do to get over it , and also feel fantastic and feel that I've achieved what I've done? Now, if your business is growing at 40% per an year, or 50 percent per year, you're probably having an enlightened view. You're probably executing really well and are probably at ease. However, if you've been growing at 5% for the past five years, well it's more challenging and you can find someone who does it better than you.
Whenever my business is expanding at five percent, I'm planning to sell. I'm thinking, okay, I'm in need of an operator. I'm more of a strategist. And how do we focus on really creating something that's amazing, where you're on point and on purpose, but your growth rate will be a big indicator of the fact that.
The final point is that you've accomplished what you were born to accomplish if, when you started your company, when I came to the business brokerage business, i decided to change the way that entrepreneurs purchase and sell businesses. I've created three of the largest brokerages. I hired, the third one, I've bought them to attract the people, and I've created a effective market. This is the thing I wanted to accomplish when I arrived to this place.
But if you left your current job and thought about this for a while and then decide to leave, would you feel happy or do you feel that you weren't able to finish what you were there to complete. So I looked back at the situation and thought, okay I'm satisfied with how my business is serving me. Are I focused and clear each day?
Do I have anything left to do and do I have new ideas for implementing that idea? These are the factors that walk you through it. It's an imprecise science, however all in all, it's an assessment of your gut. What do you think? Do you think it's time to sell your company?
If I'm thinking about selling it the item, it's usually six months too in the past. So if you have any other questions regarding this, or something else we would consider it our pleasure to assist here at Freedom Factory. Give us a call
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
Freedom Factory
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Greenwood Village, CO 80111
Phone: (844-629-8258)
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