What’s It Worth Right Now?
When you get started in your business you are usually in frantic mode. Do you remember when your focus was on getting and keeping your first customers? As the business grew you needed to make sure you collect payments. And have enough cash to pay the staff. The early days may seem a long and distant memory but some of the issues are probably still taking up some of your time. Knowing your business value is way down the list of priorities.
Is Your Business also Your Pension?
Are you expecting to fund your pension and retirement from your business? It doesn’t matter how far in the future that is, now is the perfect time to start thinking about what your business value is and how you are going to extract that value. If you don’t you stand a chance of being very disappointed when you want to leave your business.
From experience we know that many business owners have no idea how to value their business from the perspective of an investor. Just because you’ve spent 25 years building it doesn’t mean an investor is going to see the same value as you do. Doing something now avoids a lot of disappointment later. Getting a reality check before you start the exit or ownership transfer process means you are in a better position to make a difference to your business value.
Are You in Control of Your Business Value?
You might feel in control of your business now, but how quickly would that change if you or a close family member became seriously sick or incapacitated? Or worse? More than 50% of business owners experience something unplanned that results in them leaving their business so working on the value is never wasted time. Planning now means you are protecting the value you have built already.
So When is a Good Time to Plan?
Ideally you should be planning for your exit at least 5 years in advance. If you follow Stephen Covey’s 7 Habit of Highly Successful People, then you’d start your business with the end in mind. Preparation means you can optimise your business value over time. This allows for circumstances outside your control to have minimal impact on your biggest asset.
Many of us spend years contributing to our pension funds. We get an annual statement of funds so we understand what that will mean in retirement. Doesn’t it make sense to do the same with your business? Especially if it’s going to fund your post-working life style. Understanding the value of your business means you’ve got options if life takes a bit of a detour.
If you want a FREE valuation of your business, click here to use our valuation tool and get your report immediately – https://successionplus.co.uk/business-valuation/
