This video will look at a minor problem we face in our business that is a business valuation calculator. People look at real estate and tools such as Zillow or take a look at Kelly blue book of cars and they say, why don't you have an online business valuation calculator?
We've seen you doing it for a long time and, in reality, we'd love to. Problem is it's hard. So there are a few very good benchmarks, such as earnings and revenue, and we can discuss guidelines and what they look like but what makes us difficult to achieve is that you can have two businesses that have the same revenue and earnings, worth hugely different amounts. Literally two, three X each other, not even as close. This is due to intangibles.
There's so many things to an enterprise including intellectual propertyand defensibility software that create an even more complicated discussion rather than simply, Hey, what are your earnings and are you worth five times this hypothetically. We're now working on the issue. It's probably too far too early to speak about it, but we're working with an incredible business to resolve this issue, and will come up with a solution shortly. But in the interim should you have any concerns about how do you improve the value of your business or what your business is worth, why not contact us at Freedom Factory. We're looking forward speaking with you soon.
How to prepare my business to sell
Entrepreneurs often aren't sure how to prepare their businesses to sell. If you've made the decision that you'd like to sell your business. What next? Well, the first thing you need to do is to get your house in order to prepare your business for selling. Therefore, you should obtain three or two years of tax of tax documents.
Financials and then put them together. Take them to your accountant and get ready for. If you've not created an operating manual, this would be the perfect time to do so. You're familiar with how your company is run, and you know the ways that different departments interact, but when you are selling your company, you'll want for it to be as effortless as possible to transition to the 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 and put your house in order. The final piece is discover, well, how to put your team together. Find a great appraiser and broker. Get an idea of the value your business has. Create a story, and then decide how we going to get the business to market?
When will we introduce it to the market? You know, what's the current tax climate. What can I recast my financials? What I mean by that is really straightforward. They're going to, we're going to look at the information from your 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 saying all the money that your business earns during the process of filing tax returns. It's a game to reduce isn't it? Tax evasion is not legal. Tax avoidance is very smart. It's why you're looking to spend as little tax as you can. Then, you have to translate that you know, from some of your non-cash expenses, depreciation, you know certain discretionary expenses and then add it into the equation to maximize the value accurately.
Highlight the value your business generates which will bring about a significant change. Finally, you should know, what industry are you planning to enter? How do we maximize your multiple? There are ways to be able to do this. Think about the industry you're in. Figure out, you know all your financials.
Create an operation manual to ensure that the transition is as smooth as you can. And all of this is going to be, is going to help you in forming the best team together. Find the right appraisers, and find the best brokers to assist you in preparing your company for selling If you require any help with this contact us to us by calling Freedom Factory.
When is the right moment to sell my business?
This is an extremely important issue and when is the right time to sell your business? This one is a bit 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 is kind of my favorite place.
The first thing I'm going recommend to you is a change of scenery. Take a break from the workplace. Escape the daily grind 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 simply go there and change your location, and get somewhere you are comfortable.
Then think of your company. Then I take a look and then think about it in three ways. First, am I here and do I have a clear understanding? Am I really into my business? Are I doing my best to serve my company or is my business serving me? And I think it's too short to live where you work for your company. Your business is your personal vehicle for more freedom and wealth.
The way I think of freedom is quite simple - it's doing whatever you like, whenever you need, whenever you want and with whom you'd like. And if you're enjoying your work and think, God, this is amazing, and I am here and I am in the right place and doing exactly what I'm supposed to do and that's how I look at selling my businesses to other entrepreneurs, then that's awesome.
The time is not right to sell your company. If you're not certain about that, I would think a little bit harder and then take a deep breath and ask, do I have the right vision? Do I have a clear idea on where
I'm planning to expand my business on in the next three, perhaps even five years? What should I do to get over the issue and feel good and feel that I've succeeded in what I've done? Now, if your business is growing by 40% per one year or even 50% a year, you're probably having an eye-opening vision. You're probably executing really well and you're probably feeling at ease. However it's possible that you've grown by 5% in the last five years, that's a little bit more challenging, and maybe you can find someone who does it better than you.
When my business is expanding at five percent, I'm planning to sell. I'm thinking, okay. I'm looking for an operator. My style is more of a strategic person. And how do we focus on making something amazing, where you're right on target and focused However, the rate of growth is a good indicator of the fact that.
The final point is that you've accomplished what you set out to do if you, were to start your own business. When I first began my business brokerage business, i decided to change the way entrepreneurs purchase and sell their businesses. I've created three of the biggest brokerages. I've either hired the third one, I've bought them to attract the staff, and have created a more efficient market. This is the goal I set out to do when I came to this place.
However, if you quit your current company and thought about this for a while and then decide to leave, would you feel happy or do you feel that you didn't complete the task you were there to complete. When I look back on the situation and thought that's fine does my company serve me. Do I feel clear and focused each day?
Do I have anything left to accomplish and do I have fresh ideas to implement the vision? These are the questions that walk you through it. It's a bit of an imprecise science, but all in all, it's an exercise in gut-check. Do you agree? Do you think it's time to sell your business?
Because usually if I think about selling the business in six months, it's too to be. If you have other questions regarding this, or any other topic, it would be our pleasure to assist us here in the Freedom Factory. So just give us a call
Check out https://freedomfactory.com/about-tyler-tysdal/ 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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