While success can be measured in many ways, every entrepreneur dreams of taking their company well into the millions. What does a $10 million business look like on paper? How is it organized? What are its characteristics? This article looks at some of the common features of multi-million-dollar businesses and what it takes to sell one.
Characteristics of a $10 Million Business
Multi-million-dollar companies come in various sizes and operate in different industries but often have the following common features:
These companies average between $2 million and $3 million in annual profits. The remaining value of each business can be tied to its physical assets and other value markers.
Employees and Leadership
Most multi-million-dollar organizations have 15 or more employees and a management team consisting of at least three or four key leaders. They will often staff their management team with people who possess a specific aim to reach these large profits.
Stability or Growth Potential
These companies often achieve success by displaying financial stability or strong growth potential. The most successful companies remain stable and continue to grow regardless of the broader economic climate.
Evolving Workplace Culture
In recent years, many companies have opted to employ a fully-remote workforce, which means that even $10 million companies can exist without a brick-and-mortar location.
Others don’t even need a website to operate and maintain success and strategic growth, showing the diversity of businesses that achieve this financial benchmark.
What It Takes to Sell a Multi-Million Dollar Business
Selling a multi-billion-dollar business takes a bit more consideration than selling a startup or a less-successful company. Here are some of the best practices for selling a $10 million business:
Get a Business Valuation from a Professional Broker
To sell your business, you’ll need to know how much it’s worth. A professional broker can perform a thorough, accurate business valuation, ensuring you get the best price.
Keep Your Books in Order
The value of your business depends on your current assets and your financial forecasts. Your financial documents will prove important in assessing how much your business is truly worth.
Understand the True Profitability of Your Business
A list of assets can’t always summarize your company’s value. Your business may have specific earnings or growth potential that influences its overall value and may entice the right buyers.
Make a Good First Impression
Put your best foot forward by highlighting what makes your business special and the key factors that influence your present and potential earnings.
Organize Your Legal Paperwork
Having your legal documents in order will smooth the transition and also help you remain in compliance with legal or regulatory issues throughout the process.
Know Your Reason for Selling
Why are you selling? It may be a time to transition as you retire, or you may simply want to cash out of the company you’ve invested in. Make sure you’re ready for this transition so that you can feel satisfied with your selling decision.
Case Study: Contractor Connect
Sunbelt Business Brokers recently had the opportunity to sell a virtual company, Contractor Connect, to private equity. This business buys contractor leads from large public companies and then calls the leads, connecting them to one of their contractors for an instant quote and a quick turnaround profit. Despite not having an office, most of their salespeople working from home, and hiring a few full-time W2 employees, the company sold for over $12 million.
Help with High-Dollar Financing
Your buyers may need help in obtaining high-dollar financing. Sunbelt Business Brokers can help buyers connect to banks specializing in these deals. For more information or a free valuation, contact Sunbelt Business Brokers of Naples today.