Most business owners are buried in the day-to-day operations of their business and don’t focus on the value of the business until it’s too late.
In fact, many do not start researching the value of their business until they are ready to sell it. This is much too late! All too often I’ve seen business owners learn too late what they should have been doing with their business in order to maximize the value of it.
What usually happens is the business owner meets with a business broker to make the sale happen. The business broker then delivers some unexpected news.
First, the value of the business is much less than what the business owner thought.
Second, there is a lot of information a potential buyer will want to see, like financial information, metrics, marketing statistics, sales forecasts, customer analysis, product line contribution margin, forecasted information, benchmarking comparisons, employee statistics, and written policy and procedures.
Third, the buyer will likely require an employment contract with the business owner because it is the business owner who makes the business run on a day to day basis. If the business owner goes away, then the business could too.
You can see why a business owner may get discouraged. The good news is that this is preventable!