I tell my clients that a business should be built with the thought of selling. Just as we keep track of our personal financial status so should an evaluation of your business be completed yearly, if possible, but at least once every two years.
There are many reasons why a business evaluation is important:
- Your business should be an asset on your personal financial statement
- Yearly evaluations help keep track of the business value from a selling perspective.
- A qualified business broker will complete an evaluation, often at no charge, and the lessons learned are extremely valuable:
- The business broker will walk you through the things that a buyer will look at when making an offer.
- Items like your record keeping and accounting principles will be evaluated and you will learn the importance of keeping accurate records
- A prospective buyer for a business of any size will most likely conduct an audit and look at:
- Financial records
- Client records
- Business trends
- Marketing material
- And much more.
- At the end of the evaluation, you will know not only what your business is worth in its current condition, but also how you can increase the value of our business.
Too many small business owners work for years and then close their businesses instead of selling. They don’t realize the value and/or they have not conducted the business operation in such a way as to create a sellable entity.
Many small business owners don’t have a proper retirement program set up and their business should be their retirement when they sell. With that thought in mind, why would anyone not want to start now and work at preparing their business to be sold?
One of my support group members is an extremely knowledgeable and well qualified business broker. Work at adding such a member to your own support group if you don’t already have one.
Risk must be evaluated not by the fear it generated in you or the probability of your success, but by the value of the goal.
Nick J. Petra CFP www.strategicduck.com Let us help you build your retirement in your business!
Make it a Successful Today!