2 min
The Art and Science of Selling Your Business Freedom Factory's Podcast
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- Entrepreneurship
Today's episode of the podcast, Robert Hirsch from Freedom Factory discusses "The Art and Science of Selling Your Business".
Listen to the podcast, watch the video https://freedomfactory.libsyn.com/the-art-and-science-of-selling-your-business or read the transcript below.
Probably the most frequently asked question that I get is how do you determine the selling price of your business? And the reality is its part art and part science. I'll go over some of the science, then I'll go over a little bit of the art, and again, experience goes a long way.
Coming back to the science part of it, some of the really simple pieces are what's your profits? Incomes is often revealed in EBITDA or your earnings before earnings tax devaluation and amortization. We convert that into seller's discretionary cash flow for all of our customers. And again, when you're paying your taxes, EBITDA is a game of reduction. The discretionary capital is a video game of maximization or accurately reflecting all the cash flow that your company produces.
You're also going to have things like industry multiples, and sometimes there's little nuance things like if your e-commerce organisation versus a satisfied by Amazon company, you're going to get an actually various numerous. So we wish to ensure to position it properly. A few of the other things, market codes, we had a client and the name of their service was excavation.
Ends up that excavation companies are valued at two to two and a half plus assets. When I say 2 to two and a half, that's a multiple of incomes. Will construction companies of that size have to do with 4 and a half to five. And it ended up that although they began as an excavation company, over 80% of their incomes came as a construction company.
So we rearranged it and that assisted the market code. But whatever we finish with all these numbers, we ensure to take a look at market equivalent and what's the marketplace appearing like? What are the best sales that we can hang our hat on? How does a bank value it? Is it going to be an SBA type organisation? And now suddenly we're starting to get into the art.
My name's Robert Hirsch, and I'm the founder here at Freedom Factory. All we do is help business owners offer companies. That's 100% of our life. When I awaken in the morning, I'm taking a look at market comps, I'm looking at sales, I'm looking at, all right, how do we take full advantage of the sales price of our company and truly work as a partner?
So. Whether you're a physical company that's been around for 20 years or a digital company that's been around for two, we're going to look at all the science and combine it with the art to help you maximize your sales price. Give us a, call it Freedom Factory today. I look forward to speaking with you soon. Please like and subscribe and we'll see you soon.
Contact Freedom Factory
Freedom Factory
5500 Greenwood Plaza Blvd., Ste 230
Greenwood Village, CO 80111
Phone: 844-MAX-VALUE (844-629-8258)
https://www.freedomfactory.com/
https://g.page/freedom-factory-denver
Today's episode of the podcast, Robert Hirsch from Freedom Factory discusses "The Art and Science of Selling Your Business".
Listen to the podcast, watch the video https://freedomfactory.libsyn.com/the-art-and-science-of-selling-your-business or read the transcript below.
Probably the most frequently asked question that I get is how do you determine the selling price of your business? And the reality is its part art and part science. I'll go over some of the science, then I'll go over a little bit of the art, and again, experience goes a long way.
Coming back to the science part of it, some of the really simple pieces are what's your profits? Incomes is often revealed in EBITDA or your earnings before earnings tax devaluation and amortization. We convert that into seller's discretionary cash flow for all of our customers. And again, when you're paying your taxes, EBITDA is a game of reduction. The discretionary capital is a video game of maximization or accurately reflecting all the cash flow that your company produces.
You're also going to have things like industry multiples, and sometimes there's little nuance things like if your e-commerce organisation versus a satisfied by Amazon company, you're going to get an actually various numerous. So we wish to ensure to position it properly. A few of the other things, market codes, we had a client and the name of their service was excavation.
Ends up that excavation companies are valued at two to two and a half plus assets. When I say 2 to two and a half, that's a multiple of incomes. Will construction companies of that size have to do with 4 and a half to five. And it ended up that although they began as an excavation company, over 80% of their incomes came as a construction company.
So we rearranged it and that assisted the market code. But whatever we finish with all these numbers, we ensure to take a look at market equivalent and what's the marketplace appearing like? What are the best sales that we can hang our hat on? How does a bank value it? Is it going to be an SBA type organisation? And now suddenly we're starting to get into the art.
My name's Robert Hirsch, and I'm the founder here at Freedom Factory. All we do is help business owners offer companies. That's 100% of our life. When I awaken in the morning, I'm taking a look at market comps, I'm looking at sales, I'm looking at, all right, how do we take full advantage of the sales price of our company and truly work as a partner?
So. Whether you're a physical company that's been around for 20 years or a digital company that's been around for two, we're going to look at all the science and combine it with the art to help you maximize your sales price. Give us a, call it Freedom Factory today. I look forward to speaking with you soon. Please like and subscribe and we'll see you soon.
Contact Freedom Factory
Freedom Factory
5500 Greenwood Plaza Blvd., Ste 230
Greenwood Village, CO 80111
Phone: 844-MAX-VALUE (844-629-8258)
https://www.freedomfactory.com/
https://g.page/freedom-factory-denver
2 min