As a person who works with small and medium-sized companies on generating more and better revenue, one of the first questions I ask, and need to establish a clear answer for with a client is:
What’s your exit strategy? At one point or another every business either is sold or closes. Yours’ is one of those. So the question becomes at what time and what value do you want to sell? If you don’t know those answers, then you might as well be working for someone else.
Why work as hard as a business owner generally must, just to earn the dollars you would earn working for someone else? At the end of the day, you deserve to walk away with a substantial sum for all of the business building you have accomplished, but you won’t, unless you start panning to make your business valuable for someone or some company to buy down the road.
I always suggest that every client meet with a Business Broker once a year, just to get a good idea what they need to do to build value in the company. Ask them, what will it take to sell my business for 1.5 million dollars. Am experienced business broker can tell you in an hour, and then you need to listen to their advice.
My client Choice Business Opportunities has written an excellent blog on selling a business. When it’s time for you to make that move, please read this article. It’s full of excellent advice.
You can also watch this interview with Mark Cuban on small business and how that relates to business valuations.
Please do your self a favor, go and spend some time with one of the many business brokers who in most cases would be happy to explain how to grow your business to it’s highest valuation.