I want to look at a minor problem we face in our business that is a business valuation calculator. People are looking at real estate and tools like Zillow, or they go through the Kelly blue book of automobiles and ask"Why don't we have a calculator for business valuations?
It's been going on for a long time, and the reality is we'd love to. The problem is that it's difficult. And so there are a couple of really good baselines, like revenue and earnings and we can talk about guidelines and what they look like. What makes it difficult to achieve is that it is possible to take two companies that have the same revenue and earnings, but with vastly different multiples. In reality, two, three X the other, and they're almost not even as close. This is due to intangibles.
There's so many things to the business of a company including Intellectual property rights, defensibility tools, and so on that create an even more complicated discussion than just, Hey, what are your earnings and are you worth five times the amount you're imagining. We're currently working on the issue. It's probably a little far too early to speak about the issue, but we're currently working with an incredible business to resolve this issue, and will come up with a solution shortly. However, in the meantime, if you have any queries about how do you improve the worth of your business, or how much your company is worth, then why don't you contact us toll free at Freedom Factory. We're looking forward to talking with you soon.
How to prepare my business to be able to sell?
Many entrepreneurs aren't sure of how to prepare their business to sell. You've decided that you'd like to sell your business. Now what? First, what you'll need to take care of is to put your house organized to get your business for selling. So go and get two or three years worth of tax or tax-related reports.
Financials and then put them together. Find them from your accountant and have the documents ready for. If you've not made an operational manual, this is the perfect opportunity to create one. You're familiar with how your company operates, and you understand how the different departments interrelate however, when you decide to are selling your company, we want to make it as easy as possible for the transition to the new owner.
The value of that will to be taken into consideration in the price of sale. So , get your operations manual and job descriptions together and put your house in order. The third step is to find, you know, how to put your team together. Find a reputable broker and an appraiser. Find out the value your business has. Create a story and figure out how we going to get the business to market?
When are we going to take it to market? What's the current tax environment. You know, how do I change my financials? What do I mean by that is really simple. We're going to look at you EBIDTA or your accountant's ability to do the same thing, and we're going to translate it into the seller's discretionary cash flow. That is.
A fancy way of describing all the money that your business earns as you file your tax returns. It's all about minimization, right? Tax evasion is not legal. Tax avoidance is a smart strategy. So you're trying to pay as low a tax as possible. Then, you need to translate that, you know, into the non-cash costs you incur such as depreciation certain discretionary expenses and then add it into the equation to maximize the value.
Make sure you highlight the value your business creates which will make a big difference. Also, do you know which industry you likely to be in? How do we maximize your multiple? And there are ways to achieve that. Consider the kind of sector you're in. Figure out, you know, all your financials.
Create an operation manual to ensure that the transition is as smooth as possible. And all of this will be will be easier in forming the best team. Find the best appraisers, and find the best brokers to help you prepare your company for selling If you require any assistance, give us a call here by calling Freedom Factory.
When is the right moment to sell my company?
This is a crucial subject and when is it the right time to sell your business? This question has a bit more art than science. It's basically a gut check of the things you've learned. We're outside. This is my backyard. It's in my mountain house , and it's a bit of my favorite place.
The first thing I'm going to recommend to you is a change of scenery. Take a break from the office. Take a break from the commute or with your loved ones or on vacation. Now figure out some area where you can go, no matter if you like to fish, ski or go to the mountains , or go to the beach , and whatever else, just go somewhere and switch your place of residence and go to a place that you are comfortable.
Think on your own business. When I think about it, and I analyze it using three ways. First, am I here and am I in the right place? Am I really into my business? Am I serving my business or is my business serving me? It seems to me that it's too short to be living where you work for your company. Your business is your personal vehicle for more freedom and prosperity.
What I mean by freedom is quite straightforward - it's about doing whatever you like, whenever you desire, and as often as you want, with whom you want. If you are in love with your work and consider, God, this is incredible, and I'm there and I'm in the right place and doing exactly what I'm supposed to do and that's how I think about selling businesses to entrepreneurs in general, then that's awesome.
And it's not time to sell your business. If you're not certain about this, I'd consider a bit more, and I would take a deep breath and ask, is my business positioned with the proper perspective? Do I have a clear view on where
I'm planning to expand my business on in the next two, three, or maybe even five years? What can I do in order to resolve it and feel great and confident that I've accomplished what I've accomplished? Now, if your business is growing 40% a an year, or 50 percent a year, you're probably having an enlightened view. It's likely that you're doing a great job and you probably feel that you're in the flow. However If you've been growing at 5% for the past five years, well it's slightly more challenging, and maybe you can find someone who does it better than you.
Whenever my business is expanding at 5percent, I'm considering to sell. I'm thinking, okay, I'm in need of an operator. I'm more of a strategic guy. What can we do to focus on creating something that is amazing, where you're on point and on purpose However, the rate of growth will be an important indicator of this.
And the final thing is, you've done what you came to accomplish if, were to start your own business. When I first began my business brokerage business, i knew I wanted to change the way entrepreneurs purchase and sell businesses. I've started three of the largest brokerages. I've hired one of them, or bought them to attract the staff, and have really made it a much better market. And that's what I set out to accomplish when I arrived to this place.
However, if you quit your current business and think about this for a while, would you feel resolved or would you feel like you didn't finish the job you set out to accomplish. Then I re-read it and I say, okay I'm satisfied with how my business is serving me. Are I focused and clear every day?
Do I have any remaining tasks to accomplish and do I have a fresh set of ideas to implement the vision? These are the things that walk you through it. It's a bit of an imprecise science, however all in all, it's an exercise in gut-check. What do you think? Are you convinced that it's time to sell your company?
If I'm thinking about selling it the item, it's usually six months too late. If you have other questions on this or any other topic we would consider it our pleasure to assist us here in the Freedom Factory. We're waiting for you to 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.
Call Freedom Factory for a free business valuation
Freedom Factory
5500 Greenwood Plaza Blvd #230
Greenwood Village, CO 80111
Phone: (844-629-8258)
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Ty Tysdal Business Broker
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