For Every Business Owner
Who Deserves The Ultimate Pay Day
ATTENTION BUSINESS OWNERS:
Do You Have An Exit Strategy?
Would You Like To Sell Your Business One Day?
How Much Is Your Business Worth and …
Will Someone Buy It?
For Business Owners who want to maximise the sale value of their
business, retire with more cash in the bank… and enjoy more
lifestyle choices… the time to act is now!
Small Business Valuation Multiples
Valuing a business is not particularly easy when it is your own business. It’s easy enough when you’re looking to invest in a business. Then what you’re mostly interested in is the present net worth of the business and whatever you estimate its growth potential to be.
Calculating the net worth of a big business is so easy anybody could do it. Small businesses are a completely different kind of thing.
When calculating the net worth of a small business, the balance sheet is less helpful. It’s not just that small business balance sheets are inherently skewed, and it’s not just that the balance sheet shows only a small part of the picture. It’s also that the balance sheet is dealing with much smaller numbers than would be the case for big business, so there’s a lot more volatility.
If that sounds too complicated, it’s because very large numbers tend to inherit some stability due to their size. When you are looking at a multi-billion dollar economy, a million or two dollars of fluctuation here or there is not much to be concerned about. In a small business economy, even small changes can lead to big consequences. So it’s a very different game indeed.
Small business valuation multiples are an especially complex topic. Most people, in fact, wouldn’t have a clue what you were talking about if you happened to mention such a thing in conversation.
Obviously the goal in any business valuation is to isolate the key factors that will influence the potential selling price of the business or its shares.
Typical Small Business Variation
The typical small business is unsophisticated and tends to focus on a single activity or a very small range of related activities. This often means small businesses don’t have the safety net available to larger businesses in terms of diversification.
Small businesses also rarely own other small businesses. Each small business tends to be a stand-alone entity, with many individuals seeing complex ownership structures as a tax avoidance strategy associated with white collar crime. That’s not necessarily an accurate picture, but it’s the picture most people tend to believe in.
So when you are tasked with valuing a small business, it is likely that you will not have to consider the same factors that you would have to consider when valuing a large business.
In truth most small businesses are not worth much by virtue of the fact that they are small businesses. There are a few exceptions to the rule, but in general a small business that remains small from foundation through to the time it is ready to be sold is not a high growth business prospect.
As this is the case, you will have to justify almost everything, and work quite hard to distinguish the points that make this particular small business worth a buyer’s consideration. No easy task even under the best of circumstances, but if the profit trend is not a positive one, then it becomes much more difficult.
This is why accurate valuations are so important to the outcome of any prospective business sale. The good news is that you’re not entirely alone in the task, because help is available if you want it.
You can contact consultants from The Exit Strategy Group, a Melbourne based business that helps business owners plan their exit from business, for a free consultation that can help you get ready for valuing the business. In fact you can even have these consultants prepare the valuation for you, because this is as large part of what they do every day and they are very skilled at it.
To find out more, contact The Exit Strategy Group on 1300 394 878.
The Exit Strategy Group can assist in working out how to calculate what your business is worth, how to value your business, business succession planning, how to sell a small business and transition planning.
In this breakthrough book, you will discover there’s more to a profitable
exit strategy than just selling your business…with answer to these and
many more myths believed by countless business owners :
Myth #1: I don’t need an exit strategy until I’m ready to sell my business
Myth #2: I can’t afford to dedicate the time involved with exit planning
Myth #3: The wealth of my business is defined by how much I earn
Myth #4: If I have a growth strategy, why do I need an exit strategy?
Kerry Boulton, CEO and Founder of The Exit Strategy Group and NEXUS Business
Coaching, is Australia’s most respected exit strategy advisor. With over 20 years in
business as an entrepreneur, transformative coach and consultant, sought-after
speaker and talented facilitator, Kerry wrote The Uncensored TRUTH About Exit
Strategies to help as many business owners as she can to monetise the wealth that’s lying in their businesses.
The Uncensored TRUTH About Exit Strategies details how to build a strong and
successful exit plan, which is an absolute must if you want to get full value from
any sale. Kerry exposes and debunks many myths and gives you practical advice. She
walks you through what most people don’t know – or refuse to believe – about the
process of planning their exit.
Kerry believes exit planning is a process, not a destination. She helps you overcome
challenges you’re likely to face as a business owner and most important, the steps to
ensure you find financial freedom and do not become just another statistic.
The Cold Hard Facts You NEED to Know If You Want To Sell Your Business Someday
81% of Australian business owners plan to retire in the next 10 years
53% of them have no exit strategy
22% will shut shop*
How To Increase The Value of Your Business By Up To 71%* In Just 24 Months …and Have the Biggest Pay Day of Your Life
*Based on actual client results to date
Are you ready for the huge wave of business sales looming on the horizon and a lot of potential competition? Buyers will be picking and choosing only the best. Email info@TheExitStrategyGroup.com.au and ask for your FREE Value Builder Report.
AND…when you order your FREE copy of my book, The Uncensored Truth About Exit Strategies” you’ll find out …
…there’s a lot more to your Exit Strategy
than a succession plan or just selling your business…
You’ve worked hard for years building your business. You know how much value you’ve created and it’s worth plenty to someone who can take it to the next level.
The question is – how do you even start thinking about your exit plan when you aren’t anywhere near ready to exit or sell your business?
The gap between the idea of selling – or creating any sort of succession plan – and actually getting the deal on the table on your terms and at the time you want – can be very wide and very deep.
The fact is…only 20% of business owners who say they plan to sell their business ever make it their ultimate pay day.
That’s a very sobering statistic. Will you be in the 20% who do?
Many business owners simply don’t know what they need to know to prepare for succession, transition of ownership and exit. Exit strategies are not just about making money, Business owners often have other goals such as establishing a legacy, ensuring the business remains in their family, or continuing to have a say in what happens in the business.
…No matter what exit strategy you choose – you can guarantee your best outcome by simply this: PLANNING IN ADVANCE. There are immediate benefits to getting started preparing your exit strategy. You don’t have to wait for the exit date before claiming more of your wealth!
Exit strategies are something every investor looks for… The questions are the same – no matter what the size of the business. How am I going to get my money out?And how much are you going to get as the owner?
Having an exit strategy worked out in advance helps ensure you like the answers to those questions and gives you some control over your business’s future.