Tony Samples
Even though most business owners have approximately 85% of their net worth attributed to their business, most run their business day after day, month after month, year after year, and have no idea what their business is worth. They may think they know, but often the price they have in mind is not reality.
We believe that as a business owner, you should always have a realistic idea of what your business is worth. Even if you aren’t ready to sell right now, knowing this number will set you up for success. Here are five reasons why:
- Financial Planning: Having your financial planner guesstimate the value of your business can lead to a wildly inaccurate picture. We have seen too many business owners who are ready to retire, only to realize that the proceeds they were counting on from the sale of their business will be much less than expected.
- Emergencies: If your health takes a turn for the worse and the company has to be sold quickly, having a recent valuation on hand will save you a step and speed up the process.
- Daily Decisions: When you know where you currently stand, you can make decisions about where you want to go. A valuation can not only tell you the value of the business today, it can identify areas of concern while you have more time to correct them.
- Approached by a Buyer: If someone says they want to buy your business, knowing what the company is worth will help you start the conversations faster.
- Growth: Knowing your value can help you decide how best to grow your company: should you open a second location, add more sales people, go deeper with current clients?
Whether you’re planning your future, doing estate planning, or thinking about selling, you should always know your value. It’s an inexpensive and relatively painless way to make sure you are making wise business and personal decisions.
Contact us to start the confidential process.
