Great Question! It is worth as much as the buyer is willing to pay you for it. Cheeky, I know. Actually, it is more complicated than that. In fact, it is the wrong question – entirely.
Let me explain…
You ask how much is it worth, because maybe you are romancing the notion of selling or you need an ego stroking. However, the question is not how much “is it”…the question should be how much “could it” be worth.
It is the rare unicorn that is perceived to be worth more than it probably is. The rest of us deal with the harsh reality that our businesses do not command the maximum potential valuation. As I talk with entrepreneurs, founders, key shareholders of businesses…one thing remains a constant…
Their business is not really ready for an EXIT.
Sure, the notion is awesome – sell out, cash the check and head to the beach…sip a tall frosty beverage and chill. If only.
Here are some key considerations:
- How “portable” is your business? Can you toss the keys to a new owner and skip town without it crumbling to the ground?
- How “sustainable” is your business? Can the team innovate, adapt, thrive and survive – without you and your magic?
- How “systematized” is your business? Can the business sustain itself when losing key people during transitions?
- How “clean” is the business? Books, records, IP ownership, contractor agreements, litigation skeletons, and more.
- Does the business have a “dream buyer”? Is there a list of ideal synergistic or strategic buyers out there? What are you doing to make the NEED you?
There are other considerations, but those should get your juices flowing…
It is totally possible to sell for more than you or others think, but you have to be prepared for that journey. Want to chat about your situation? Contact me (menu above).
Leave a Reply