I want to talk about a little problem we face in our business that is a business valuation calculator. People are looking at real estate and tools such as Zillow, or they go through the Kelly blue book of cars and think"Why don't we have a business valuation calculator?
You've been doing this for a long time, and the reality is we'd like to. The problem is that it's difficult. So there are a couple of excellent baselines, for example earnings and revenue. We can discuss guidelines and what they look like. But what makes it difficult to achieve is that you can take two businesses that have the same revenue and earnings, and they are worth significantly different multiples. In reality, two, three X the other, and they're almost not even close. This is due to intangibles.
There's a myriad of aspects to a business including intellectual property, defensibility software, and so on that really make it a more complex discussion rather than simply, Hey, how much are you making and how much are you worth? this hypothetically. We're now working on it. It's probably too late to discuss it, but we're working with an incredible company to solve this problem and will come up with a solution shortly. In the meantime should you have any concerns regarding how to improve the value of your business or even what your business is worth, why not give us a call by calling Freedom Factory. We're looking forward speaking with you soon.
How to prepare my business to sell?
Many entrepreneurs aren't sure of how to prepare their businesses to sell. You've decided that you want to sell myour business. Now what? Well, the first thing you'll need to take care of is get your home in order to prepare your company to sell. Also, obtain two or three years worth of tax or tax-related records.
And financials and put those together. Take them to your accountant and have them ready to go. Second, if you haven't put together an operations manual, this is the perfect moment to start. You know how your business operates, and you understand how the different departments interrelate and when it comes time to sell your business, you'll would like ensure that it is as effortless for you to transfer the business to a new owner.
The value of that will to be taken into consideration in the sales price. So go put your operations manual and new job descriptions and get your house in order. The third step is to finding out how to the right team. Find a good broker and an appraiser. Determine what your business is worth. Start to craft the story and figure out, okay, how are we going to take it to the market?
When are we going to introduce it to the market? You know, what's the tax situation currently. You know, how do I change my financials? And what I mean by that is really simple. They're going to, we're going to look at your EBIDTA or your accountant can do the same thing and then translate it into the seller's discretionary cash flow, which is.
A fancy way of saying all the money business earns as you file your tax returns. It's a game of minimization, right? Tax evasion is illegal. Tax avoidance is a smart strategy. So you're seeking to be as tax-efficient and pay as little tax as possible. Well, we must translate that, you know, into certain of your other expenses such as depreciation, some of your discretionary stuff and add that back in to maximize the value.
Make sure you highlight the value your business generates to bring about a significant change. Also, do you know what field are you going to be in? How do we maximize your multiple? And there are ways to achieve this. Consider the kind of industry you're in. Find out, for instance, all your financials.
Create an operation manual to make the transition as easy as you can. And all of this will be, is going to help you when you put the right team together. Find the most qualified appraisers, locate the right brokers to assist you in preparing your business for sale If you require any help with this get in touch with us here at Freedom Factory.
What is the best moment to sell my company?
This is a crucial subject and when is it the right time to market your business? This is a little more art than it does science. In the end, it's an examination of what you know. We're outside. This is my backyard. It's in my mountain house and is kind of my happy place.
The first thing I'll suggest to you is get an escape. Take a break from the office. Take a break from the commute, either with your loved ones or on vacation. You must now find a location where you could go, whether you love to fish or ski , or go to the mountains , or go to the beach , and whatever simply go there and change your location, and find a place where you're comfortable.
And then think about your business. Then I take a look and I analyze it using three ways. First, am I here and am I in the right place? Are I actually in my business? Are I doing my best to serve my company or does my business serve me? In my opinion, it's too short to be living where you work for your company. Your business is your personal vehicle for more freedom and money.
And the way I define freedom is quite straightforward - it's about doing what you want, when you want, as often as you'd like, with whom you want. And if you love the work you're doing and think, God, this is amazing, and I am there and I'm focused and I'm doing what I'm supposed in the way I view selling businesses to fellow entrepreneurs This is awesome.
The time is not right to sell your company. If you're not sure about that, I'd take a second look and then look at the situation and ask: Do I possess the correct perspective? Are I able to see clearly? vision on where
I'm going to take 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 confident that I've accomplished what I've accomplished? If your company is growing by 40% per year or 50% per year, then you've probably got an enlightened view. You're probably doing really well and you probably feel that you're in the flow. However it's possible that you've grown at 5% for the past five years, well that's a little bit more challenging and somebody else can do it better than you.
Whenever my business is growing at five percent, I'm planning to sell. I'm thinking, okay, I'm looking for an operator. My style is more of a strategist. And how do we focus on making something amazing, where you're focused and purposeful however, your growth rate will be a big indicator of the fact that.
The final point is, you have done what you set out to do when you started your company, when I began my business brokerage business, i was aware that I wanted to alter the way that entrepreneurs buy and sell their businesses. I've started three of the biggest brokerages. I've either hired one of them, or purchased them to gain the right people, and I've transformed it into a better market. That's exactly the thing I wanted to do when I came here.
However, if you quit your current job and thought about this for a second, would you feel resolved or would you feel like you weren't able to finish what you came there to do. Then I re-read it and I say that's fine, is my business serving me. Am I clear and engaged each day?
Do I have any remaining tasks to do and do I have fresh ideas to implement the idea? These are the questions that will guide you through it. It's an imprecise science, but all in all, it's a gut check. Which are your thoughts? Are you convinced that it's time to sell your company?
Since, if I ever think about selling it the item, it's usually six months too late. If you have other questions on this or any other topic, it would be our pleasure to assist you with your questions here at Freedom Factory. Give us a call
Visit https://freedomfactory.com/selling-process/ 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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Contact Tyler Tivis Tysdal Best [Colorado business brokers
https://g.co/kgs/pZYRf7
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https://tylertysdal.academia.edu/
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Ty Tysdal Business Broker
https://opensea.io/tylertysdal
https://tylertysdal.blogspot.com/2021/10/how-to-valuate-and-sell-your-business.html
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