There are a lot of things people don’t tell you about being a business owner. And these little surprises are typically why people end up listing their business for sale. It is implied that you will work day in and day out. But at the end of the day, you reason that it will all be worth it. Nothing beats being your own boss and appreciating a business that you have built from the ground up.
And it is worth it. However, there are a few bits of knowledge that would have been crucial to know before I got started. In my business owning experience, I encountered a lot of problems and dealt with issues I had assumed were out of my hands.
So now, I would like to share my personal tips with you. Here is some insight on what I wish I knew before I owned my business. And if you are looking into buying or selling your own business, you can contact Rockrose Realty at one of our Florida locations.
1. You Need to Understand Accounting
If you are not great with numbers, this could be a little bit of a set-back for you. However, even if you are dealing with the details in daily operations, it is vital that you keep an eye on the inner workings of your business. The books truly reflect your business and they play a major factor when you list your business for sale. The key ingredient to selling to a potential buyer is knowing the accounting statistics. The buyer wants to know how the company profited and what sort of revenue to expect. Understanding accounting lays the groundwork for being able to sell your business as a whole. If you know where your expenses are going and how profits are managed, you are going to be better able to convince buyers the value and overall listing price you place for your business.
2. The Two Ways To Make Money As A Business Owner
Not all business turn a profit as they go. Sometimes a business owner only makes money when they eventually let the business go. Owners should be wary of the tax repercussions that come when making a profit. However, when it comes time to sell, you want to be able to show that your company is valuable. It’s a Catch 22. But there’s a difference between running a lifestyle business and running a business to make tons of money. Knowing the two ways to make money, it would be wise to run your business as a lifestyle business for the majority of its run (about three-fourths), and then pivot to show as much profit as possible in the last leg of the business. The reason for this is that buyers typically won’t look past your most recent statistics. For example, use the last five years of your business to document as much profit as possible since 99% of buyers won’t look past that mark. This ensures you make money as you go as well as at the final sale.
These tips only scratch the surface of what it takes to own your own business. If you want to list your business for sale, contact Rockrose Realty in Florida. We can tell you everything there is to know about owning your own business!