This podcast will look at a minor issue we're facing in our business which is a valuation calculator. People look at tools and real estate like Zillow, or they take a look at 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 like to. Problem is it's hard. So there are a couple of excellent baselines, for example earnings and revenue, and we could discuss guidelines and what that looks like but what makes us difficult to achieve is that you can take two businesses, same revenue, same earnings, and they are worth vastly different multiples. It's like two, three times the other, and they're almost not even far apart. And that's because of the intangibles.
There are a lot of things that go into an enterprise such as intellectual propertyand defensibility software and more that really make it an extremely complex issue than just, Hey, what's your income and are you worth five times this hypothetically. Now we're working with it. It's probably too far too early to speak about the issue, but we're currently working with an incredible business to address this issue and we'll have a solution soon. But in the interim should you have any queries regarding how to improve the worth of your business, or what your business is worth, why not give us a call at Freedom Factory. We look forward to speaking with you soon.
How can I prepare my company to sell
Entrepreneurs are often confused about what they should do to prepare their company to sell. If you've made the decision that you want to sell myour business. What do you do now? Well, the first thing you'll need to take care of is get your home organized to get your business for selling. Therefore, you should take two or three years of tax-related tax reports.
Also, financials and put them together. Take them to your accountant and have ready for. In the second, if you've never put together an operations manual, now is an ideal time to do so. You know how your business is run, and you know how the different departments interrelate and when it comes time to decide to sell the business you would like ensure that it is as simple as possible to transition to a new owner.
And that value is going to be taken into consideration in the price of sale. So , get your operations manual and job descriptions together and make sure your home is in order. And the third piece is finding out how to put your team together. Find a great appraiser and broker. Find out the value of your business. Start to craft the story and then figure out how we going to get the business to market?
When do we plan to introduce it to the market? You know, what's the tax situation currently. What can I alter my financials? And what I refer to as simple. They're going to, we're going to take 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 business earns during the process of filing tax returns. It's a game to reduce, 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 need to translate that, it's from the non-cash costs you incur, depreciation, you know, some of your discretionary stuff and add that back in to maximize the value accurately.
Make sure you highlight the value your business creates which will bring about a significant change. Finally, you should know, what industry are you going to be in? How do we maximize your multiple? And there are methods to accomplish this. But think about what field you're working in. Figure out, you know all your financials.
Put an operations manual together to help make the transition as simple as is possible. All of this will be, can be a huge help when you put the right team. Find the best appraisers, and find the best brokers to help you prepare your company for selling, and if you need assistance with this, give us a call to us toll free at Freedom Factory.
When is the right moment to sell my company?
This is an extremely important topic and when is the best time to sell your business? 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 the backyard of my mountain home and is a part of my home.
The first thing I'm going to suggest to you is get a change of scenery. Leave the office. Get out of the commute or with your family or out. Now figure out some area where you can visit, regardless of whether you want to fish, ski or go to the mountains or go to the beach , and whatever simply go there and switch your place of residence and go to a place that you're comfortable.
Think about your business. And I look at it and then 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? In my opinion, your life is too short to live where you work for your company. Your business is your personal vehicle to greater freedom and money.
What I mean by freedom is quite straightforward - it's about doing what you want, when you desire, and as often as you want and with whom you'd like. And if you love the work you're doing and feel like, God, this is incredible, and I'm here and I am clear and I'm doing exactly what I'm supposed and that's how I view selling my businesses to other entrepreneurs This is awesome.
It's not the time to sell your company. If you're unsure about that, I'd think a little bit harder, and I would dive in and say, is my business positioned with the proper vision? Have I got a crystal clear idea on where
I'm going to take my business over the next one, two, three, maybe even five years? What should I accomplish to overcome the issue and feel good and confident that I've accomplished what I've accomplished? Now, if your business is growing by 40% per an year, or 50 percent per year, you probably have a clear vision. It's likely that you're doing a great job and are probably at ease. However, if you've been growing at 5% over the past five years, well it's more difficult, and perhaps somebody else can do it better than you.
Whenever my business is growing at 5percent, I'm considering to sell. I'm thinking, okay, I'm in need of an operator. It's more of a strategic guy. What can we do to focus on really making something incredible, and you're on point and on purpose however, your growth rate is a good indicator of that.
The last thing to remember is, you have done what you came to do if you, were to start your own business, when I came to the business brokerage business, i was aware that I wanted to alter the way entrepreneurs purchase and sell businesses. I've started three of the largest brokerages. I've either hired the third one, bought them to attract the staff, and have really made it a much more efficient market. That's exactly 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 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 said that's fine, is my business serving me. Am I clear and engaged each day?
Do I have anything left to do and do I have fresh ideas for implementing that idea? These are the things that will guide you through it. It's a bit of an unreliable science, but in the end, it's an exercise in gut-check. What do you think? Do you think it's time to sell your business?
If I'm thinking 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 pleasure to assist you us here in the Freedom Factory. So just give us a ring.
Click here 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.
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