Assessing expenses also includes looking at your own salary. If you’re taking home a big chunk of change every month, that too is an expense that’s detracting consistently from your business’ valuation. “I always tell entrepreneurs that the biggest paydays are exits,” explained Castro. “Think through the long game and what you can get on the back end. Taking a smaller salary when you’re in the thick of it will pay off if your company is valued more when you exit.
What value does the company offer to the market? How can this valuation continue to rise? This assessment is determined by net income, but also by cash flow. By focusing on the ‘heartbeat’ of a business , you’ll see more cash flow come in.On the list of potential expenses that can detract from your company’s multiple is something beyond the costs associated with running your business: it’s. “I always teach that time is your most valuable asset, and refer to time as ‘non-refundable minutes’.
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Source: BusinessInsider - 🏆 729. / 51 Read more »