When business owners are getting ready to “exit their business,” via retirement or selling, they have to come up with an estimate of what their company is worth. In general, they have a tendency to overshoot the value, realizing it’s not worth as much as they thought.
The result is that owners are forced to directly work in their business longer, in order to increase the value of it. If they neglect to do so, they may experience issues trying to maintain their current financial lifestyle.
Fortunately, there are tools available to help you make a more accurate estimate of what your business is actually worth, and have the opportunity to plan accordingly. One tool that Keye Strategies trusts is the Value Builder System. It consists of a 13-minute questionnaire that calculates a value for company from a scale of 1-100.
Based on quantitative data gathered from over 30,000 companies, businesses that achieve a score of 80 or more are predicted to receive offers for their business that are 71% than the average business.
You’ll begin by entering your contact information, including your name and the name of your business. This allows the Value Builder System to provide you with information and services that may help you increase the value of your business.
Next is a series of questions about the state of your business. Are you in decline or growing? Do you sell an easily accessible commodity or an exclusive product? What is your relationship with your customer base? All of these questions, and more, will help determine just what your business is worth.
Finally, you’ll share some information about how far into the process of selling you are. If you’ve already received an offer of intent to buy the business, you’ll share that with the tool, which can influence your score further.
If you’re thinking about exiting your business, Keye Strategies has services and resources to make the best of this big decision. Check out our eBook on maximizing business value, or find out more about transition coaching.