A business valuation is critically important when selling your business. There is a strategic process to sell your business. Typically, a savvy business owner will start 5-10 years before ready to sell. Once you know how much your business is worth and the important areas that increase the value of your business, it allows you to focus on the areas that grow the value. Your business valuation plan should also involve getting advice from your CPA, lawyer, Financial Planner, and Insurance agent to prepare your business so it is as sell-able as possible.
Tips to Maximize Your Business Value Before a Sale
You will leave a lot of money on the table if you try to rush the process through at the last minute. If you have an illness or some other catalyst that forces you to sell your business without an exit plan already in place, there will undoubtedly be weaknesses that either significantly lower the purchase price, or worse, results in no sale at all. Since most owners have never sold a business before, they don’t realize that it takes time and strategic planning to optimize the business value drivers to get the best purchase price.
As a result, you try to sell your business before the enterprise value has been maximized. To review the complete article, please read our article.
It can be a difficult thing for a business owner to plan for the sale of their business. They have nurtured and grown the business over many years, and the thought of selling it is not something they want to contemplate, much less create a plan for. For many people this is like meeting with a lawyer to create a family Trust for when you pass away.
Some recommendations about the importance of business valuations are explained below by Tod Fiscus (Principal, Transition360). We provide 40 years of experience getting our clients an optimal price for the sale of your business.