I want to look at a minor problem we face in our business which is a valuation calculator. People are looking at tools and real estate such as Zillow or look at Kelly blue book of automobiles and ask, why don't you have a business valuation calculator?
You've been doing this for so long but the truth is we'd love to. The problem is that it's difficult. And so there are a few excellent baselines, for example earnings and revenue, and we could discuss guidelines and what that looks like. But what makes it so difficult is it is possible to take two companies with the same revenue, same earnings, but with significantly different multiples. Literally two, three X each other, almost not even far apart. This is due to intangibles.
There's a myriad of aspects to an enterprise including Intellectual property rights, defensibility tools and more that create an even more complicated discussion rather than simply, Hey, what's your income and you're worth five times this hypothetically. We're currently working on this issue. It's probably a little early to talk about it, but we're working with an amazing company to resolve this issue, and we're going to come up with a solution shortly. But in the interim If you have any queries about how you can increase the value of your business or what your business is worth, why not contact us by calling Freedom Factory. We're looking forward to talking with you shortly.
How to prepare my business to sell?
Entrepreneurs are often confused about what they should do to prepare their company to sell. So you have decided you'd like to sell your business. What do you do now? Well, the first thing you must do is to put your house in order to prepare your company to sell. Also, get two or three years worth of tax of tax records.
Also, financials and put them together. Get them from your accountant and get ready for. Second, if you haven't put together an operations manual, this would be an ideal opportunity to create one. You're familiar with how your company works, you know how the different departments interrelate however, when you decide to sell your business, you wish ensure that it is as easy as possible to transition to the new owner.
This value is likely to be reflected in the sales price. Therefore, put your operation manual and job descriptions together , and make sure your home is in order. The third step is to discover, well, how to put your team together. Find a great broker and an appraiser. Determine the value of your business. Start to craft the story and figure out what you want to accomplish. we going to bring it to market?
When are we going to take it to market? It's all about the tax situation currently. What can I recast my financials? What I refer to as easy. We're going to take the information from your EBIDTA or your accountant can do similar things and then translate it into seller's discretionary cash flow, which is.
A fancy way of saying all the money business earns during the process of filing tax returns. It's all about minimization you think? Tax evasion is not legal. Tax avoidance is extremely smart. You're looking to spend as little tax as you can. Then, you must translate that, you know, from certain of your other expenses, depreciation, you know, some of your discretionary expenses and then add it back in to maximize the value.
Flag all the value that your business creates to bring about a significant change. Finally, you should know what field are you planning to enter? How do we maximize your multiple? And there are ways to be able to do this. Think about the sector you're in. Find out, for instance, all your financials.
Make an operational manual to make the transition as easy as you can. And all of this will be, can be a huge help in forming the best team. Find the best appraisers, locate the right brokers to help you prepare your business for sale If you require any assistance get in touch with us to us by calling Freedom Factory.
When is the right moment to sell my business?
This is an extremely important topic and when is the best time to sell your company? This one is a bit more of an art than science. And ultimately it's kind of an assessment of the things you've learned. We're outside. This is the backyard of my mountain house , and it's a bit of my favorite place.
The first thing I'm going suggest to you is get a change of scenery. Leave the office. Escape the daily grind whether with your family or away. Now figure out some area where you can visit, regardless of whether you want to fish or ski , or go to the mountains or visit the beach or whatever else, just go somewhere and change your destination and get somewhere you are comfortable.
Then think about your business. Then I take a look and think about it in three questions. First, am I here and do I have a clear understanding? Are I actually in my business? Am I serving my business or does my business serve me? And I think life is too short to live in a place where you work for your company. Your business is your personal vehicle for more freedom and wealth.
The way I think of freedom is fairly easy - doing what you want, at the time you want, as often as you'd like and with whom you'd like. And if you're enjoying 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, which is the way I think about selling my businesses to entrepreneurs in general and entrepreneurs, then that's great.
It's not the time to sell your business. If you're not sure about that, I would take a second look, and I would dive in and say, is my business positioned with the proper idea? Have I got a crystal clear vision on where
I'm planning to expand my business on in the next one, two, three, maybe up to five? What should I accomplish to overcome it and feel great and confident that I've succeeded in what I've done? Now, if your business is growing at 40% per year or 50% a year, you're probably having an enlightened view. It's likely that you're doing a great job and you probably feel in flow. However, if you've been growing at 5% over the last five years, then that's a little bit more difficult, and perhaps someone else is able to do it better than you.
Whenever my business is expanding at five percent, I'm planning to sell. I'm saying, okay, I'm in need of an operator. It's more of a strategic person. And how do we focus on making something incredible, and you're on point and on purpose however, your growth rate will be an important indicator of the fact that.
The final point is, you have done what you were born to accomplish if, if you went into your business. When I first came to the business brokerage business, i knew I wanted to change the way entrepreneurs purchase and sell their businesses. I've founded three of the largest brokerages. I've either hired the third one, I've acquired them to get the right people, and I've really made it a much better market. And that's what I set out to do when I came here.
But if you left your current company and thought about this for a while do you feel satisfied or would you feel like you didn't finish the job you set out to accomplish. When I look back on it and I say that's fine does my company serve me. Do I feel clear and focused every day?
Do I have anything left to do and do I have fresh ideas to really implement that idea? These are the things which will help you figure it out. It's a bit of an unreliable science, but in the end, it's an assessment of your gut. Which are your thoughts? Do you think it's the right time to sell your company?
Because usually if I think about selling it the item, it's usually six months too in the past. If you have other questions on this or any other topic, it would be our privilege to help with your questions here at Freedom Factory. So just give us a call
Follow this link https://freedomfactory.com/about-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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