Over the last few episodes, I have had guests on the show that have shared stories about how they built and sold their businesses. While each tale was unique, there were some common themes that I’m going to share with you today. What you don’t know when you’re building and running your business could end up costing you money on it’s sale. Similarly, knowing what to look for when you’re buying a business will impact the future profit you’re able to make. Listen up, because I’m going to tell you what you need to consider when you’re buying or selling a business.
On this episode, we’re going to talk about how many years of financial history a buyer will look at when considering an acquisition. To illustrate my points, I’ll give you an example of what a single atypical year can do to a company’s numbers. We’re also going to delve into the world of profit margins. We’ll talk about what makes up a profit margin and why it’s important to the purchase or sale of a business. Finally, I’ll give you some great insights into ways you can change your profit margins and what even a small change can do to your bottom line.
In this episode, we’ll cover:
- Debunking the myth that buyers are only looking at the last 12 months of your financial records
- How decreasing your operating costs can increase your return on a sale
- What the Covid-19 pandemic has done to the business valuations of golf courses and restaurants
- How to buy a business at a discount by knowing what you can do for cheaper
- What to compare a company’s profit margins
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