Some business owners establish a plan to sell their business as they are setting it up, while others plan to never let their business go. Regardless of what side of the spectrum you are on, it is important to know how much your company is worth at any given point in time. It is also important to know what your price is, and if the value of your business is in line with that price. Finding the time to plan your eventual business sale can seem daunting when business owners have so many day-to-day tasks to complete. All too often a budding enterprise is approached by a potential buyer with a low bid. The owner does not have a good idea of what the company is worth, and either agree to the deal or is forced to scramble to find a value he or she likes. It is important to get ahead and have an idea of what your business is currently worth, and what you would like for it to be worth.
Start by finding a valuation expert who can identify a fair value for your business. This expert will consider your company's market share, profitability, future viability and more. For example, a one-person design firm may have nothing but tangible equipment to influence pricing, since the one person responsible for success will be leaving upon the sale. Conversely, an insurance agency with a reputable staff and booming business might fetch top dollar. If the value comes in lower than you would like, set a plan to continue to hire, upgrade, grow and market the company to increase sales and profits until the value grows to a price you would consider acceptable for your business. Continuing the plan will only increase the value of your company. Working with an accountant will ensure you have all the relevant numbers at your fingertips, from gross and net business income to payroll and proof of tax compliance.
At Akin, Doherty, Klein & Feuge, PC, we are not professional business valuation experts, but we have the tools and the contacts to help get the process started. If you have any questions regarding the value of your business or what that calculation might look like, please reach out to us at 210-829-1300.