BUSINESS OWNERS: ARE YOU READY?
By Brian Wheeler, Director of Wealth Management & Business Brokerage
If someone offered to buy your business tomorrow, would you know whether the offer was actually a good one? Not whether the number sounded good, but what your business is really worth, what you would actually keep after taxes, debt and transaction costs, and maybe most importantly, whether that amount would be enough to fund the life you want after the business.
Your Business Value Is More Than a Number
Recent research from Value Builder found that 21% of business owners received a written offer for their company during the past year, but only 1% were considered ready to sell. At the same time, 58% expect to exit within five years. That’s quite a gap.
Most owners naturally start with, “What is my business worth?” I think there’s another question that matters just as much: What do I need it to be worth?
Those two numbers aren’t always the same. For many business owners, the company is their largest asset, and eventually that business value needs to translate into personal financial independence.
The good news is you don’t have to be planning to sell anytime soon to start working on value:
- Can the company operate without you?
- Are the finances clean?
- Do you have strong people?
- Is revenue overly concentrated?
- Have you thought about taxes before a transaction occurs?
These are things that can make your business stronger today while giving you more choices tomorrow. At Keystone, we believe business planning and personal financial planning belong in the same conversation. The business, the taxes, the eventual exit and your personal financial future are all connected.
You don’t necessarily need to be ready to sell. You should be ready to choose. So, if someone called tomorrow and asked what it would take to buy your business, would you be ready to answer?