Know what your company is worth

If someone knocked on your door with an offer for your business later today, what would you tell them?

The answer is simple. You would say: That’s not high enough!

While few entrepreneurs keep a continuous watch on what their business is worth, I can almost guarantee that all entrepreneurs think their business is worth more than a potential buyer does.

That’s not surprising – negotiations are all about getting a compromise between buyers and sellers.

But when a business owner doesn’t have a realistic idea of what their business is worth, they put themselves at risk of missing out on a great deal.

That is, if a fantastic offer does come along for your business, would you actually be able to recognise it and sell up?

In recent days we’ve seen Gordon Merchant, founder of surfwear company Billabong, admit that he stuffed up when he blocked a private equity takeover bid for the company at $3.30 a share, only to see the share price tumble to below $1.

He couldn’t recognise a good price when he saw it and has paid the price. Don’t let it happen to you.

Get it done – today!