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Part One – Valuing Your Trade Business – What You Need to Understand

Series: How To Sell Your Trade Business
Guest: Brandon Jacob from Contractors Financial Opportunity

Twenty years ago, entrepreneurs believed they could not sell their businesses. Today, people are opting to sell their businesses, primarily if the company can be sold on fair market value.

Buying or selling a business has its processes. A company’s financial status is not the sole factor in valuing a business. Its’ goodwill or its intangible assets are also taken into consideration.

In this episode, Brandon shares his knowledge of the processes involved in selling a business, and also shares insights on how to increase your company’s value.

If you are interested in increasing the value of and selling your business, check out these episodes too:

  • TSS205 – How to sell your value and maintain a solid sales process – [LINK]
  • TSS198 – Maximising Gross Profit in Your Business – [LINK]

      About this podcast, ‘Valuing Your Trade Business – What You Need to Understand’

      Podcast Highlights:

      • 03:43 – Business valuation
      • 09:24 – Fair market value
      • 10:18 – Compulsive buying
      • 14:27 – Looking at financial records
      • 20:17 – Market approach
      • 22:30 – Valuation of a stagnant business
      • 24:36 – The earnings approach
      • 26:40 – Perfecting your model
      • 29:15 – The definition of goodwill
      • 32:30 – Value drivers
      • 35:18 – The actual process of evaluating a company
      • 45:04 – The importance of service agreement

      Brandon shared the three approaches to assessing a business. First is the market approach. The second approach is used to evaluate a stagnant industry, and the last strategy is the earnings approach. Different methods are used for different kinds of businesses.

      For the actual process of evaluating a business, it is vital to gather the necessary data and observe the methods employed by the company. A business must exhibit the right procedures for it to sell at a high value. Another crucial aspect when evaluating a business is the confidentiality agreement between the evaluators and the business owner.

      Lastly, when you are planning to sell your business, you must perfect your model. This way, you can then introduce your model to another company that you will buy. The acquired company can then become successful and have a high market value.


      About Our Guest

      Brandon Jacob is a Certified Public Accountant and the owner of Contractors Financial Opportunity, LLC. For over 20 years, his expertise has helped clients with business valuations and transactional support when it comes to selling their businesses. He also authored two books, For What It’s Worth and Operation Exit Strategy.

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      Matt Jones
      Founder at The Site Shed
      I'm the facilitator here at The Site Shed. My passion lies in doing anything that helps trade based organisations grow. My other company, Tradie Web Guys, helps tradespeople stand out online, while The Site Shed is all about education and resources.
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