What is Your Business Worth?
Copyright Ray Pons, reprinted with permission.
What is your business worth? Not on paper but in cold hard cash.
It is never too early, or too late, to think about what your business might be worth when you want to sell it.
The whole idea of going into business for yourself is to have a thriving enterprise that spits out cash while you own it and is worth a fortune when you sell it.
Regrettably far too many small business owners come to the crashing realization that getting full fair market value of the business is easier said than done.
Savvy buyers will never pay a premium price to buy a series of headaches, hassles and problems.
If the central core of the business is you, if the success of the enterprise is directly tied to your presence, personality and perspiration, if you are the go-to-guy, go-to-gal for all of the problems, issues, concerns, crises and day to day details of everything that goes on, well who in their right mind would want to pay top dollar to buy it?
Let's face facts - no one wants to buy a job, especially yours.
For a business to attract potential buyers, willing to pay a premium price, it must be systems dependent not owner dependent. The business model must be sculpted in such a way as to generate reliable performance, dependable revenue streams and consistent results.
Systematize the business and you have something tangible to sell that people will be interested in buying. It's the proven franchise model for business validation and predictable success.
The system is the solution. The system brings you freedom, time off and greater control. The system has value.
So why then do most small businesses fail to build the system and create carefully crafted well-documented operations manuals? Because they are too darned busy running the business to figure out what kind of a business it is that they want to be running!
Have you ever been too busy driving to take time out to get gas?
Building the system, documenting the process and keeping it maintained is hard work, it takes time and it can cost money. It can be a daunting overbearing proposition and the business owner is often worn out from putting out fires to take on yet another "big-rocks" item.
But without it you'll never get top dollar for your enterprise.
What is your business worth? Without a system it may not be worth as much as you'd hoped. With a system it might be worth a lot.
Next month we will provide a step by step process to assist you in the creation of your business system and develop a freedom-generating operations manual.
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