Welcome back to my weekly articles on business building. In order to extract value from a business it needs to be sellable. If part of your plan is to sell your business, it will be critically important for you to understand how buyers will value your business. Unlike publicly traded companies, there is no stock market for a buyer to go to in order to find out what your company is worth. There are several methods a buyer will use to assess value and this article outlines the key ones and best practices you can use to help better understand and value your own business.
Most owners get one chance to get it right when they decide to sell, yet most owners cannot sell the business they built (only 1 in 10 are successful) because they did not build a sellable asset. If selling your business to fund your future lifestyle is a must, ask yourself whether you are prepared or not, and then identify what you need to do to get to where you need to be.
With up to 76% of Canadian businesses reporting that they hope to exit in the next 10 years, being unprepared might cost you both your legacy and your retirement. With only 1 in 10 having a plan, the odds against are not in an owner’s favor.
We welcome you to visit us at: www.mexit.ca to download this article and to find more resources focused on preparing your business for both future successes, and for a successful exit or transition.