When you don’t know what your business is worth, you can make some pretty bad life decisions.

That’s a bold statement. Let’s explain:

Your business is likely your largest asset. You’re probably counting on selling it (whether to your kids, employees, or a third-party) to help fund your retirement or next set of life goals. Whether retirement is on the horizon or you’re still focused on growing the company, knowing its value at all times is vitally important. Why? Because making changes in the business that impact its value can take a few years to see results.

When you know what your business is worth:

  1. You can feel confident in your financial planner’s projections for retirement.
  2. You can make the best day-to-day decisions in your business.
  3. You are prepared for an emergency that could take you out of the business.

After valuing and selling businesses for over a decade, we’ve talked with a lot of business owners like you. We know how gut wrenching it can be to learn that your business isn’t worth what you think it is.

Let us be your guide to help set you up for success when you’re ready to retire.

  1. Reach Out: Schedule a conversation.
  2. Documentation: Answer questions and send financials to help us determine value.
  3. Understand: We’ll spend an hour going over what your business is worth and why.

 

A cautionary tale:
Assuming that you know your business’s value can be more dangerous than you might think. We once worked with a business owner who was confident that his business was worth $3 million. How did he come up with that amount? He had read about valuing businesses in The Wall Street Journal. What he didn’t understand was that what he was reading was about large, publicly traded companies. The same valuation methods don’t apply to ‘main street’ businesses.

When he came to us to help him sell his business, the first thing we did was perform a valuation. While he has a very strong, healthy business with a lot of growth, the business is only worth about $800,000. This is still a lot of money, but not enough for his situation. He has been using that $3 million amount as the basis for all of his financial planning. He’s taken on $1.5 million in debt that he won’t be able to pay off with the sale proceeds. And the real kicker, he has stage four cancer and has no time left to try to increase the value.

Stories like this are too common and break our hearts. Learn your value today to avoid making bad decisions and having a gut wrenching situation like this.

 

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