This video will look at a minor issue we're facing in our business that is a business valuation calculator. People are looking at tools and real estate such as Zillow or go through the Kelly blue book on automobiles and ask"Why don't we have an online business valuation calculator?
It's been going on for a long time but the truth is we'd love to. But it's not easy. And so there are some excellent baselines, for example earnings and revenue. We can discuss guidelines and what that looks like. What makes it so hard to do is it is possible to take two companies that have the same revenue and earnings, but with vastly different multiples. Literally two, three X each other, almost not even as close. This is due to intangibles.
There's a myriad of aspects to the business of a company including Intellectual property rights, defensibility tools and more that really make it a more complex discussion that just asking what's your income and you're worth five times that hypothetically. We're currently working on the issue. It's probably too early to talk about it, but we're working with an amazing company to resolve this issue, and we'll have a solution soon. However, in the meantime If you have any questions about how do you increase the value of your business or even what your business is worth, why don't you contact us at Freedom Factory. We're looking forward to talking with you shortly.
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 want to sell myour business. What next? Well, the first thing you must do is to get your house ready for your company to sell. So go and take two or three years worth of tax of tax documents.
Also, financials and put them together. Get them from your accountant and get ready for. If you've not created an operating manual, now is an ideal time to do so. You're familiar with how your company works, you know the ways that different departments interact, but when you sell your business, you'll wish for it to be as simple for you to transfer the business to the new owner.
And that value is going to be taken into consideration in the sale price. So go put your operations manual as well as new job descriptions together , and put your house in order. The final piece is find, you know, how to put your team together. Find a good broker and an appraiser. Determine the value of your business. Start to craft the story, and then decide what you want to accomplish. we going to bring it to the market?
When will we launch it? What's the tax situation currently. How do I change my financials? What I mean by that is really simple. We're going to take the information from your EBIDTA or your accountant can do the same thing and then translate it into seller's discretionary cash flow. That is.
A fancy way to describe all the money business earns during the process of filing tax returns. It's all about minimization isn't it? Tax evasion is a crime. Tax avoidance is a smart strategy. So you're looking to spend as low a tax as possible. Well, we need to translate that, you know, into the non-cash costs you incur depreciation, for instance, some of your extra-ordinary expenses, and then put it into the equation to maximize the value accurately.
Flag all the value that your business generates which will have a major impact. Finally, you should know, what industry are you going to be in? How do we maximize your multiple? There are ways to achieve that. But think about what industry you're in. Figure out, you know, all your financials.
Create an operation manual to make the transition as easy as possible. All of this will be can be a huge help when you put the right team together. Find the best appraisers, and find the best brokers to help you prepare your business to sell and, if you require assistance with this get in touch with us right here, at Freedom Factory.
Is it the right moment to sell my company?
This is an extremely important issue and when is the right time to sell your business? This question has a bit more art than it does science. It's basically a gut check of your knowledge. We're outside. This is the backyard of my mountain house , and it's a bit of my happy place.
The first thing I'm going suggest is to get some fresh air. Get out of the workplace. Take a break from the commute or with your family or out. 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 go to the beach and whatever else you like, go to a place and change your destination and find a place where you feel really comfortable.
Think on your own business. Then I take a look and then consider it in three questions. First, am I here and am I in the right place? Am I really into my business? Do I serve my business or is my business serving me? And I think life is too short to live in a place where you serve your business. Your company is your personal road to greater freedom and money.
The way I think of freedom is pretty simple - it's doing whatever you like, whenever you need, whenever you'd like and with whom you'd like. And if you love the work you're doing and feel like, God, this is amazing, and I am in the right place and am clear and I'm doing exactly what I'm supposed and that's how I look at selling businesses for other entrepreneurs, then that's awesome.
The time is not right to sell your business. If you're unsure about this, I'd take a second look and then take a deep breath and ask, do I have the right perspective? Do I have a clear view about where I want to go?
I'm planning to expand my business in the next one, two, three, or maybe or even in five years? What do I need to do in order to resolve it , and also feel fantastic and feel that I've succeeded in what I've done? If your company is growing at 40% per year or 50% per year, then you've probably got a clear vision. You're probably executing really well and are probably in flow. On the other hand If you've been growing at 5% over the past five years, then it's more challenging, and maybe someone else is able to do it better than you.
Whenever my business is expanding at 5percent, I'm considering to sell. I'm thinking, okay. I need an operator. My style is more of a strategic person. How do we concentrate on creating something that's extraordinary, that is right on target and focused, but your growth rate will be an important indicator of the fact that.
The final point is that you've accomplished what you set out to do were to start your own company, when I entered the business brokerage business, i knew I wanted to change the way that entrepreneurs purchase and sell businesses. I've started three of the largest brokerages. I hired, the third one, acquired them to get the staff, and have transformed it into a effective market. This is the thing I wanted to accomplish when I arrived to this place.
But if you left your current business and think about this for a second, would you feel resolved or would you feel like you weren't able to finish what you set out to accomplish. Then I re-read the situation and thought, okay does my company serve me. Am I clear and engaged every day?
Do I have anything left to do and do I have new ideas for implementing that idea? These are the factors that will guide you through it. It's a little bit of an imprecise science, however in the end, it's an assessment of your gut. What do you think? Do you think it's the right time to sell your business?
If I'm thinking about selling it in six months, it's too in the past. So if you have any other questions regarding this, or anything else, it would be our pleasure to assist you with your questions here at Freedom Factory. So just give us a ring.
Visit https://freedomfactory.com/why-freedom-factory/ will give you a free business valuation to find out the worth of your business. Denver business broker Tyler Tysdal will help you to prepare your business for sale.
Call Freedom Factory for a free business valuation
Freedom Factory
5500 Greenwood Plaza Blvd #230
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Phone: (844-629-8258)
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