Understanding Business Valuation Before You Sell

BRISBANE, Australia - EntSun -- Can your business be sold on your terms, at the value you need to fund your retirement or next venture? Let's look at some factors to consider.

Owner reliance: The number one concern

Surprisingly, the top concern keeping small business owners awake at night is not cash flow – it's owner reliance. Simply put, can your business run without you? A survey of 2,791 business owners found that high owner reliance was their biggest concern, with only 5% saying their business could operate independent of them.

Owner reliance is critical because it affects both sustainability and growth. Many people start businesses for freedom and lifestyle flexibility, yet the reality for many is that their business cannot function without them. A business overly reliant on the owner may struggle to perform consistently, generate profit, or grow in value.

Systems, processes and policies

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To overcome owner reliance or personal goodwill, consider implementing a strong staff structure supported by clear systems, processes, and policies, all underpinned by a culture of training and development. Even with these measures, it's worth asking: what would happen to your business if you stepped away? Only 23% of owners say their departure would have no impact.

Profitability, cash reserves and cash flow

Profit is the lifeblood of any sustainable business. Beyond paying yourself a market salary or shareholder dividends, a profitable business generates positive cash flow, reduces reliance on lenders, and provides the resources to reinvest and grow.

Yet 76% of business owners report limited or no cash reserves. Sufficient cash reserves are crucial not just for emergencies but also to seize unexpected opportunities, whether that's purchasing new equipment, expanding services, or acquiring another business.

To learn more about business valuation and readying your business for a potential sale, visit https://azimuthpartners.com.au/business-valuation/7-key-considerations-for-small-business-owners-in-queensland/.