If You Don’t Know, You May Be Leaving Your Hard-Earned Money On The Table
I have never known an entrepreneur whose goal it was to end up with less than they invested over the course of their company’s lifetime, and I’ve worked with many. So I’m willing to bet that, like so many others, your ultimate goal is to maximize your business’s value in the hopes of going on to enjoy the retirement of your dreams. How do you plan to get there? Well, the first step (and most important step) in maximizing your business value is to understand its true value – not guess at it.
Unfortunately, countless business owners have learned this lesson the hard way. According to several surveys on the subject (and my personal experience) there are many ways a business owner can hurt the value of their business. The following six ways to hinder the growth of your business.
Business Growth Don’ts
- Don’t make retirement assumptions based on faulty data. Those who do are shocked to learn that they won’t have enough to live out their ideal retirement scenario. They may even need to work longer than they had anticipated.
- Don’t sell your businesses at the wrong price or at the wrong time. When the time comes to sell, make sure to work with somebody who can help you price your business accurately based on market data and don’t forget to consult the calendar to make sure you are putting your property on the market at the right time.
- Don’t forget to pay attention to the timing of gifts and how timing impacts your succession plan. Currently, in 2018, the Tax Cuts and Jobs Act has made it a prime time to gift your business, but all that could change after the next election.
- Don’t pay more in taxes than is necessary. Seriously? Why would anybody do that!
- Don’t forget to work with a valuation professional who can understand key valuation drivers. With this information, you hold the key to maximizing your business’ value.
- Don’t assume business growth will just “happen.” Make a plan that will help you grow the value of their business. Your team of advisors can help you flawlessly execute your plan.
Listen to episode 83, “the value of valuations: increase your practice ownership potential”, with Mary Beth Koester on Rea’s award-winning podcast, unsuitable on Rea Radio.
Wouldn’t you be motivated to make some changes if you knew that altering your cash flow and risk levels associated with your business could substantially increase its overall value? A business valuation is the best place to start.
Arm yourself with the information you need to increase your short- and long-term cash flow, lower the risks associated with your business and increase the value of your business. Give me a call at 614.923.6556 to learn if you are on track to leave your hard-earned money on the table and what you can do to change course now.
By Paul Weisinger, CPA/ABV, CVA, CEPA (Cleveland office)