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I think every business owner has in the back of their mind that one day they will sell their business and that they will receive the biggest payout of their life and that this pay out will set them up for retirement.
Many of the business consulting and coaching businesses preach about “working on the business, not in the business” and to “start with the end in mind” when developing, running and growing your business.
All of which is very true…
I have worked with a number of business owners who are keen to get out of their business and have gone down the path of having their business valued only to be shocked to see that the business they have put 5, 10 or even 20 years into, is worth little more than its fixtures, fittings and stock.
Its not a bad thing to be told the truth, warts and all, it gives you a base to work from.
On the other end of the spectrum, I know of two sales that took place, one at the height of the mining boom in WA and some Americans came over and paid 10x what the business was worth on paper. The other sale was more recent and despite it taking place, bang smack in the middle of the GFC, this business owner (who started his business in a garage in Brisbane) was offered 10x what he thought it was worth, once again from an international interest. To his credit, he knocked them back to secure an extra million for his efforts and then he quickly accepted the offer.
So how can an Australian business be worth next to nothing, that no one would be interested in buying v’s another Australian business that is pursued by overseas interests and offered 10 times what it is worth?
The answer is not simple or easy but it does come down to one word, potential.
If a business is tired, in an industry that is in decline, has no systems and no future, where the owner is the brains and the brawn behind the operation, when the owner cant go on holiday because there is no one else able to do the job and they are fundamentally irreplaceable then the value of this business is quite low.
On the other hand, a business that is systemised, automated, achieving constant linear growth, has constant reliable cash flow, is an innovator in their emerging industry or a growing niche within an established industry, then the current value and the potential value of the business is what a potential buyer is interested in purchasing.
In today’s global market, the potential sale of an Australian business is greater than it has ever been before.
International money and the availability of hedge funds is also exciting in a shrinking global market.
Free trade agreements across the pacific, also opens up opportunities to trade and position your business for sale on the international market.
But first things first…
To get your business to be worth more than a year’s net profit, what do you have to do?
- have a successful marketing programme
- have competent, talented, autonomous, committed and reliable team members
- systemised processes that are ultimately automated
- growing and reliable cash flow
Ultimately, you want to be able to work in your business and on your business, when it suits you and the business.
The secret to maximising the value of your business for sale is not to start 12 months, 2 years or even 5 years out. The key is to start right now and have everything in the business organised and up to date so that a potential buyer will be able to review and see all the reasons why they could not knock back the opportunity to purchase your business, before someone else buys it.
If you would you like to know what to do in your business to maximise its value at sale time and how to run it as profitably as it can be now and for the rest of the time that you choose to own it, but you don’t know where to start, well we can help!
Watch this video and get a taste of what I am talking about…
At ABC Business Improvement we have or are assisting builders, tradesmen, retailers, restaurants, wholesalers, manufacturers, mechanics, professional service providers like accountants, lawyers, pharmacists, dentists, importers/ exporters and we can assist you too!
At ABC Business Improvement we will organise a meeting where you will;
– Uncover the challenges you are facing
– Define a path to overcome them
– Create a first step plan to move forward
– Gain a sense of excitement and relief, knowing where you are going
Be one of the first 5 to contact us this week and we will organise a copy of our ‘business exit strategy’ check list to be delivered to you…
If you are ready to be challenged and you are sick of being stuck in your current predicament, I implore you to take up this offer.