If you finally decided to sell your business, one of the things you should make sure is to maximize the value of your business. There are three tested and proven practical ways to do so, and they are the following:
- Maximize your multiple – Different companies have different multiples. Computing multiples may sound tricky as some companies started as a small business but then, later on, grow more significant in terms of scope and nature. A perfect example is an excavation company that later on turned into a construction company, as 80% of its revenue comes from construction. From a business perspective, multiple pertains to how much time earning is your company worth. For example, if your company is making $1 million and your multiple is two, then your company is worth $2 million-plus capital assets.
- Recasting your financials – The next important thing is to pay your taxes and EBIDTA, and they are designed to be minimized. Freedom Factory, one of the highly reputable brokerage firms in the country, uses tested and proven strategies in recasting your financials. They do a pivot table and translate it to the seller’s discretionary cash flow. What it does is it accurately reflects the cash flow and value your company creates.
- Maximizing your intangibles – When you have a buyer that comes to look at your business, they will surely have many questions to ask. As someone selling a company, you must be prepared to answer all those questions beforehand. Make sure you prepare all the necessary information and documents that might be asked by your buyer, as it means you are serious at closing a deal. If everything is in disarray, then it would unintentionally push your buyers away. Your business will be on the lower end. Therefore, you have to be ready at all times, and this includes getting your intangibles in place.
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If you are going to sell your business, you have to be prepared in every possible way. Most of the time, you cannot do it all alone. You would need a team to help you navigate through the ins and outs of selling a business. Freedom Factory is one of the institutions that help in marketing your business at a maximum possible value. Robert Hirsch and the rest of the Freedom Factory crew will be more than happy to help you walk through the entire process.