I want to look at a minor 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 on cars and think, why don't you have a business valuation calculator?
You've been doing this for a long time but the truth is we'd like to. But it's not easy. There are some very good benchmarks, such as earnings and revenue, and we can talk about guidelines and how they will look like. But what makes it so hard to do is you can have two businesses that have the same revenue and earnings, but with hugely different amounts. It's like two, three times one another, and not even as close. That's due to intangibles.
There are a lot of things that go into a business including Intellectual property rights, defensibility tools, and so on that really make it an extremely complex issue than just, Hey, what's your income and how much are you worth? the amount you're imagining. We're currently working on this issue. It's probably a little late to discuss it, but we're working with an incredible business to solve this problem and we'll come up with a solution shortly. But in the interim should you have any concerns about how you can increase the worth of your business, or even what your business is worth, why don't you give us a call toll free at Freedom Factory. We look forward to speaking with you soon.
How can I prepare my company to sell
Entrepreneurs often aren't sure how to prepare their businesses to sell. So you have decided you want to sell myour business. What do you do now? The first thing you'll need to take care of is get your home in order to prepare your business for selling. So go and obtain two or three years worth of tax or tax-related records.
Financials and then put them together. Take them to your accountant and get them ready to go. In the second, if you've never created an operating manual, now is an ideal moment to start. You know how your business operates, and you understand the ways that different departments interact however, when you decide to are selling your company, we would like ensure that it is as effortless as possible for the transition to an owner who is new.
The value of that will to be reflected in the price of sale. So , get your operations manual as well as new job descriptions and put your house in order. The third step is to find, you know, the right team. Find a good appraiser and broker. Get an idea of the value your business has. Create a story and figure out what you want to accomplish. we going to bring it to the market?
When will we introduce it to the market? You know, what's the current tax environment. You know, how can I alter my financials? And what I mean by that is really easy. They're going to, we're going to take you EBIDTA or your accountant can 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 business earns during the process of filing tax returns. It's all about minimization you think? Tax evasion is a crime. Tax avoidance is very smart. So you're seeking to be as tax-efficient and pay as little tax as possible. Well, we have to translate that it's from certain of your other expenses such as depreciation, some of your discretionary stuff and add that back in to maximize the value accurately.
Highlight the value your business generates which will bring about a significant change. And finally, you know what field are you going to be in? How do we maximize your multiple? And there are methods to achieve this. But think about what sector you're in. Figure out, you know the financials of your business.
Put an operations manual together to make the transition as easy as is possible. The whole process, and everything it will be can be a huge help in forming the best team together. Find the right appraisers, locate the right brokers to help you prepare your business for sale If you require any help with this, give us a call here at Freedom Factory.
What is the best time to sell my business
This is a really important issue and when is the right time to market your business? This one is a bit more art than 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 is kind of my happy place.
The first thing I'm going to suggest is to get an escape. Take a break from the office. Get out of the commute or with your family or away. Find a place that you can go, no matter if you like to fish, ski or visit the mountains or go to the beach , and whatever it is simply go there and switch your place of residence and find a place where you are comfortable.
Then think of your company. And I look at it and I analyze it using three questions. First, am I really 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? It seems to me that it's too short to live where you work for your company. Your business is your personal vehicle to more freedom and more wealth.
And the way I define freedom is quite simple - it's doing whatever you like, whenever you desire, and as often as you'd like, with whom you want. And if you're enjoying what you're doing and you feel like, God, this is incredible, and I'm there and I'm in the right place and doing exactly what I'm supposed to do in the way I think about selling my businesses to other entrepreneurs This is awesome.
The time is not right to sell your business. If you're not certain about this, I'd think a little bit harder and then look at the situation and ask: is my business positioned with the proper perspective? Do I have a clear idea about where I want to go?
I'm going to take my business in the next three, perhaps or even in five years? What should I accomplish to overcome it and feel great and feel that I've succeeded in what I've done? Now, if your business is growing 40% a one year or even 50% a year, then you've probably got a clear vision. You're probably executing really well and you're probably feeling at ease. However, if you've been growing at 5% for the last five years, it's more challenging, and maybe you can find someone who does it better than you.
If my company is expanding at 5percent, I'm considering to sell. I'm thinking, okay. I'm looking for an operator. I'm more of a strategic person. And how do we focus on creating something that's amazing, where you're focused and purposeful However, the rate of growth will be an important indicator of this.
The final point is that you've accomplished what you came to accomplish if, were to start your own business, when I began my business brokerage business, i decided to change the way that entrepreneurs purchase and sell their businesses. I've created three of the largest brokerages. I've either hired at least one I've purchased them to gain the people, and I've created a better market. And that's 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 while, would you feel resolved or do you feel that you didn't finish the job you were there to complete. So I looked back at it and said I'm okay does my company serve me. Am I clear and engaged every day?
Do I have anything I need to accomplish and do I have a fresh set of ideas to really implement that vision? These are the questions that walk you through it. It's a little bit of an unreliable science, but in the end, it's a gut check. What do you think? Are you convinced that it's time to sell your business?
If I'm thinking about selling it, it's about six months too in the past. So if you have any other questions on this or something else that you need help with, it's our pleasure to assist with your questions here at Freedom Factory. So just give us a call.
Go to https://freedomfactory.com/why-freedom-factory/ 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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