How Valuable Is Your Business
Over half of Canada’s current small business owners will want to retire in the next 10 to 15 years. A key to their success in achieving this goal is to fully understand how valuable their business is.
Knowing where the key strengths and weaknesses are will assist in optimizing the business value. This is vital when developing a business succession strategy. Surprisingly, few small business owners have a clear plan for exiting their businesses, and many have a difficult time determining the real value of the business.
There are a number of ways to determine the business value. Many advisors consider a comprehensive valuation as critical. While widely recognized as a suitable choice, the results can still be uncertain, especially in a volatile market.
Understanding some of the key drivers is extremely helpful in determining business value. Some examples are growth potential through scalability; repeatable revenue streams; dependence on key owners or management. Comparing the business to others in the sector, or in general, will show how similar or different the business is compared to others. This in turn will help in determining the business value and marketability.
At the Osborne Group, we help businesses with this assessment using the Sellability Score. It starts by taking a free 15-20 minute on-line survey followed by an hour-long meeting with an Osborne Group consultant to review the results.
The Sellability Score assesses a number of key business attributes and provides a scoring compared to others. Understanding how the business scores related to key attributes, and compared to others, can provide the business owner with some useful information about critical areas of strength and weaknesses.
The Sellability Score provides a good idea of areas that need focus, and those that are valuable strengths. By monopolizing on this information, the business owner can work to increase the value and marketability of the business and improve the chance of success in optimizing the value on sale – the typical goal of any business succession strategy.
It is never too early to start the process. Using expertise, as provided by the Osborne Group, can help you assess and then optimize your business value. To get started, visit www.osborne-group.com and click on the link to the Sellability Score on the Services page.
