How Much Is My Business Worth?
One of the most frequent questions that I get from business owners is: "How much is my business worth?" Before we can answer that question there are other things that we must answer and do before we can get a complete and accurate answer. First things first: If you have a desire to attract the most compatible, ready, willing and financially able business buyer, you must first present your business in the best possible light. A few questions that you should ask first are: Do I have a business that has been profitable for at the least 3 years? Do I have verifiable tax returns and financial statements to show proof? Anyone can start a business but it takes a very smart and capable person to turn it into a profitable business. As the owner of a business, can you be honest with yourself and say with 100% certainty, that you've be a successful and efficient business owner? Another consideration and question to ask is: Have a prepared for the sale of my business by putting a stellar exit plan in place to provide for a orderly sale and transition? IF you own a business and you've not put your exit plan in plan, you're causing a considerable decrease in value. IF you attract a buyer that is ready, willing and ready to do things on your terms and your transition plan is chaotic, expect the buyer to want a discount on the finally selling price as a result of having to
smooth out the "rough edges". Have you discussed in complete detail with your family about your desire to sell the business? Not doing so can cause headaches during to sell process and many business owners end up caving into the demands of their families and often times hinders the sale of the business. You may be thinking "how do any of the above effect how much my business is worth". The answer to that is-- preparation. Preparation is going to answer the question: How much is my business worth. Ideally you should start the process of getting your business prepared for sale about 2 years prior to putting it on the market for sale. The preparation that is involved will greatly effect how much your business is worth. Many business owners do not take these things into consideration when they decide to sell there business and a extremely disappointed when the official appraisal is provided and the numbers don't live up to there high expectations. Every business owner has the right to believe their business is worth a certain amount but the reality is, did you prepare? Be honest with yourself. If you did not prepare you could be in for a disappointment in the event that you need to sale immediately. Before asking "How much is my business worth?", read the above, let it sink in and if you're in need of any help get in touch and I am sure I can help you put a plan in action. To learn more, visit: http://www.ronhitson.com