Part One – Valuing Your Trade Business - What You Need to Understand

Series: How To Sell Your Trade Business

Guest: Brandon Jacob from Contractors Financial Opportunity

 

Twenty years ago, entrepreneurs believed they could not sell their businesses. Today, people are opting to sell their businesses, primarily if the company can be sold on fair market value. 

 

Buying or selling a business has its processes. A company’s financial status is not the sole factor in valuing a business. Its’ goodwill or its intangible assets are also taken into consideration.

 

In this episode, Brandon shares his knowledge of the processes involved in selling a business, and also shares insights on how to increase your company’s value.

 

If you are interested in increasing the value of and selling your business, check out  these episodes too:

 

• TSS205 – How to sell your value and maintain a solid sales process – [LINK]
• TSS198 – Maximising Gross Profit in Your Business – [LINK]

 

About this podcast, ‘Valuing Your Trade Business - What You Need to Understand’

 

Podcast Highlights:

• 03:43 – Business valuation
• 09:24 – Fair market value
• 10:18 – Compulsive buying
• 14:27 – Looking at financial records
• 20:17 – Market approach
• 22:30 – Valuation of a stagnant business
• 24:36 – The earnings approach
• 26:40 – Perfecting your model
• 29:15 – The definition of goodwill
• 32:30 – Value drivers
• 35:18 – The actual process of evaluating a company
• 45:04 – The importance of service agreement

 

Brandon shared the three approaches to assessing a business. First is the market approach. The second approach is used to evaluate a stagnant industry, and the last strategy is the earnings approach. Different methods are used for different kinds of businesses.

 

For the actual process of evaluating a business, it is vital to gather the necessary data and observe the methods employed by the company. A business must exhibit the right procedures for it to sell at a high value. Another crucial aspect when evaluating a business is the confidentiality agreement between the evaluators and the business owner.

 

Lastly, when you are planning to sell your busine

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