Do you know what your business is worth? I mean, worth it? When I say worth, I mean if you were trying to sell your business, do you know what someone is likely to pay you for your business?
The reality is that it is always hard to know what a business could truly sell for … but instead of just avoiding the question, we think it is critically important to try to answer it. Why? Because when you measure your business by external metrics, you get very clear about what adds value to your business very quickly. We, as business owners, have a fiduciary responsibility to add and build value for our businesses.
But I want to encourage you to measure this regularly and consider your business’s worth as the TRANSFERRABLE asset you are creating. Why transferrable assets? Because if the market worth you are building in your business is all about you as the owner, it may be benefiting the business in a real sense, but you won’t ever be able to actualize a payout of that worth. So the business worth that matters ultimately is the price you can command upon a sale.
For those of you who think you are nowhere near ready to sell, I still encourage you to think about the value of your business and how you are growing that value. This will help focus you as a business owner to measure how you continuously increase your business’s value. It will also help you in your planning. Valuing your business is also an important element of contingency planning – we never truly know what will happen to us, and it’s always beneficial to have clear ideas about what would happen to your business if something suddenly happened to you.
At ZümiFi, we can help clients think about their business valuation and track increases yearly. In the situations we have experienced, the average valuation increase has been 60-100% year over year!
Are you interested in increasing the worth of your business? Start tracking it now, and make sure you are continuously driving your business to grow in value.