Why your business valuation today is NOT important
Buyers are not interested in what you sacrificed for the past 10-20 years. They are only interested in the future potential of your business, and how quickly they can get a guaranteed return, with the least amount of risk for their investment.
The Mistake Most Business Owners Make:
They sell their businesses based on what it is valued at today and therefore get a fraction of what they can get.
Here’s The Golden Secret
The real money lies in the future potential of your business, not in your valuation today. This is where the real wealth lies.
Our 5 Step "Maximise Your Value" Roadmap
Determining your cashout figure - Why is this so important?
Many business owners have sacrificed years to build their businesses and then sell for a fraction of what their business is really worth. Why? There are several reasons:
1. They sell on what the business value is today, not on its future potential
2. Their business focus is making sales and profits, not building a valuable asset
3. They do not understand what serious buyers are willing to pay more money for
4. They are not aware of factors devaluing their business
5. They do not understand the real money is in the preparation, not on sales day
6. They are outsmarted by smarter negotiators because they do not know the process
For most business owners, selling their business is an emotional experience. The last thing you want is to feel like you didn’t get as much from the sale as you could have, or that you’ve sold to a buyer who wrecks your brand and integrity.
If you want to avoid “seller’s remorse,” here are 5 things you should do before closing a sale on your business.
Hire a professional to:
1) Determine the true value (future potential) of your business
2) Prepare an exit strategy roadmap
3) Correctly package your business for sale
4) Target and screen strategic buyers
5) Help structure your meetings and negotiate the best deal
No one knows what’s around the corner. Life circumstances change, markets change, competition intensifies, your energy and enthusiasm levels wear thin.
Eventually there will come a time when you have had enough. Or a competitor may make you an offer.
Your business should therefore always be “sell ready”. Being sell ready takes preparation and planning so it’s important to plan your exit strategy as early as possible even if you are not intending to sell your business in the near future.
This ensures your business is attractive to buyers and holds maximum value before any sales process begins.
No seller makes money in a fire sale. Selling out of desperation is always in the favour of the buyer. The real money is not on sale day, but in your preparation for the sale.
Trying to justify a premium price to a potential buyer when your business is not in “best selling” shape or packaged correctly is difficult and you will not attract the price you desire. Planning the sale of your business in advance and making sure the correct check points are in place to maximise your cashout price should be your top priority.
The best time to sell is when you want to not when you need to. This keeps you in control, allows you to hold your price and walk away from a bad offer that could potentially cost you millions of dollars.