Grab your company valuation documents, make sure they are up-to-date and sell away! …What? You don’t have a succession plan? Did you hear that? It was the door slamming behind the buyer as they walk out.
Creating a Succession Plan includes a business valuation. What you ‘think’ your company is worth could be much different than what the value really is. You need something more than your ‘gut’ feeling as your sticker price for your company.
You have put your blood, sweat, and tears into this venture. This company is your largest asset and while you know what it is worth, more importantly, the buyer needs to be given proof to verify your price.
Here are some steps to take to determine the true value of your company. Experts will advise you to obtain a business valuation. Some of the immediate benefits would be:
- Create the Succession PLAN! What will happen to your company once you are no longer running it? While the daily satisfaction of owning your company is pretty awesome, the big picture is your long-term goals.
- Ensure your business and your personal property are properly protected. No one wants to get through all this and at the end of the day, lose more than we bargained for. Prevent that now.
- Help to determine the value of your estate while planning for your retirement. Your company is your future. Keep this in mind when you are making financial decisions for your company as well as your personal goals.
- Do you know what your tax liability will be? Prepare for the taxable events also. You must show a profit on tax returns to support your company’s value.
- Assist in creating a sell/buy contract as needed. You know you are going to sell your company eventually. Get your documents in order so when the buyer comes knocking, you are prepared.
Determining the value of your business is a vital part of the plan. You can’t just go with your gut feeling nor sentimental value of all that it took to grow your company. You need actual, real data to represent what you already know, and you need your records to reflect this in your numbers.
Contact an expert in your area to schedule an appointment to start the conversation. Paying yourself first, the long-term goal should not include waiting until the long term is right around the corner. Plan now.