What Is My True Business Valuation Value?
One of the most important things that we should know about our businesses is what is its true business value. And yet, as a business owner, I realize that time can go by and the information that we hear can be quite confusing and we don’t always really know what our value is.At Legacy Venture Group – Tampa Business Brokers we have a lot os experience discovering what make a business sell and what does not.
Not only should we know what our value is, but what drives that value. The value in our business, and quite often we’ve been given the wrong information.
What’s the Multiple
I know that from a lot of professionals will call me up trying to help one of their clients in their heating and air conditioning company or whatever construction company or engineering company they have saying, “hey Brian, what’s the multiple for uhm you know electrical contracting company?”
And the reality is that there’s not one specific number. If it was easy as just taking a number and multiplying it times one other number, people getting certified as valuation analysts wouldn’t spend a year or two going through training and experience and practicing, et cetera, and accountants wouldn’t have to take extra classes to understand the industry. It’s quite. Often much more complicated than that, but it’s also really important.
You could have two businesses in the same industry, the same length of time that made the same amount of earnings before, interest tax, depreciation, whatever, the net profit over the last year, and yet be worth entirely different amounts of money.
And that’s due to what we call the intangibles, those things that you just can’t touch. And so it’s useful as a business owner to get an evaluation that gives you the assessment of what those value drivers are early on.
Get one today
If you have not had a business valuation in the last year or two, get one today. Use our firm. Use a firm that you trust.
Make sure that you’re getting more than just a number or a range of numbers. Get a deeper understanding of what drives value in your business.
Why is that important?
Why is that important? Too often as business owners, we wait until very late in the equation and we figure, hey, my kids aren’t going to take the business and the employees don’t have the wherewithal or what have you to really take to really give me what I need for my business, so I’m going to put it
on the open market and I want to be out in several months. Too often people think, hey, that’s just a matter of trying to sell my business like I would be if I was, you know, selling a house or property, but the complexity of the business is far more complicated than doing that sort of thing as well
As well as the fact that there are several things that you might want to do to change value.
So, if you have an early on process and then you realize that here are some of the elements in my business that I could do to change if I wanted to improve value.
You might say, well, the heck with learning SEO and putting in CRMs, I don’t need to know any of that.
But on the other hand, you might have it come to reality that says, hmm, maybe I am too much of the business.
Maybe I do need to start recording my systems and processes. In which case, you can try that on your own or bring in a great business coach.
We know a lot of those people that help people through the system or the EOS program or what have you to enhance or improve or accelerate the value of your business.
Go get a valuation today
So, bottom line is, go get a valuation today. Understand the value and also understand what drives value in your business.
You’ll be totally rewarded. By the way, if you’d like to know more about what’s involved in selling your business, you can reach out to us at LVGAdvisors.com.
That’s Legacy Venture Group. LVGAdvisors.com. Or, you can hook on to the QR code and pull up one of the books on how to sell your business.
I’ll talk to you later on. Make great things happen. Give me some feedback. I appreciate you. This is Brian Stephens with Legacy Venture Group – Tampa Business Brokers, LVGAdvisors.com.
Take care.