Tool Box
Issue No. 16 - April/May 2004
My business is worth WHAT?!?!
That’s probably not what you want to hear is it? Unfortunately, in many cases it is a sad reality, and business owners are shocked when they find out the value of their business is so much lower then they imagined. The good news is that it doesn’t have to be this way with you.
Most business owners don’t think about what their business is worth until it’s too late. The vast majority of owners don’t plan for the sale of their business and as a result they don’t take any (or very minimal) steps to maximise their return on their years of investment.
That’s a symptom associated with owners that spend too much time working IN their business and not enough time ON their business. These owners don’t think in terms of selling their business at some point in time. Frequently, they view the business as a vehicle that provides them with an income and there is a rather fuzzy thought or picture involving a sale to fund their retirement.
Consider this: For most business owners their business is the single largest asset they have.
At the time of retiring the average business owner in Australia does not have a funded pension beyond what they have set aside in their own and their spouse’s Super Fund; most will have a personal residence that has only recently had the mortgage paid off and less will have any significant investment portfolio. (Remember, these are averages so your circumstances may be better or worse off.) In many situations the family...
