Have you set your financials up correctly to best to reflect the value of your business?
All that hard work, effort, sacrifice, and pain that goes into these businesses. Surely, we want to be able to see what our potential net worth is because of that hard work?
Check out the video below where Jason talks about how you can showcase the true worth of your business by using Xero.
Why is it important to know how much your business is worth?
What if someone said to you, I’m keen to buy your business can I see your financials – you want to be able to showcase a revenue generating asset without too much hassle. Creating a custom report for your business in Xero, allows you to do this at any time, at the click of a button.
If you are looking at refinancing, knowing how much your business is worth will help with this process.
If you want to grow or expand your business, it is critical to know what revenue streams are the most profitable or where the opportunities are to increase your gross margin.
You’ve worked hard building your business, and you’re approaching retirement. Knowing the value of your business can help with succession planning when you do retire.
How can you work out how much your business is worth?
We can set up custom reports in Xero, where we move things around, group things together, add in margins etc, to showcase at the click of a button how much your business is worth.
Here are a couple of examples in different industries of how Xero can be used to work some magic.
Tradies – here’s what you need to be able to showcase
If you’re a trade, we can show your margins on materials, margin on your labour, and then we can see your gross margin (how much money your business is generating for you).
We can look at free available cash (FAC), how much the business is generating vs how much of that is generated by you.
By setting up these custom reports, it will be able to showcase the value of your business and highlight any inefficiencies, but also identify where there maybe opportunities to increase your gross margin.
Consultants, Freelancers, Contractor, Service Providers – here’s what you need to be able to showcase
Do you know what revenue streams generate you the most revenue? If everything just gets lumped into sales in Xero, you’re missing an opportunity!
You want to be able to showcase what is driving your revenue. Being able to separate out your revenue streams e.g. reoccurring revenue, project revenue, workshops, contract work, etc.
In Xero you can setup tracking categories which separates out all those different revenue streams so you can get rich, insightful data of how the business is performing and what revenue streams are the most profitable.
This will allow you to showcase the value of the business, and what is driving this revenue.
Get in touch if you would like our help setting up some custom reports for your business, so you can showcase what your business is worth.
Profit vs Cash
What is the difference between profit and cash? Why do we see profitable businesses run
Keeping the Cash Flowing
Five principles that you need to have as the foundation of your business, to ensure
7 Key Causes of Poor Cashflow
The 7 Key Causes of Poor Cashflow – often something that has been neglected and
The 5 A’s of Change
We love to watch our clients grow and develop. From starting out to being confident
The Cash Conversion Cycle
The Cash Conversion Cycle – An incredibly important notion to understand in the economic environment
4 Leadership Quadrants
What is your leadership style? Do you even have one? We can use the 4
The Ceiling of Complexity
So, you’ve hit The Ceiling of Complexity – We think that by holding back from
The Achiever Matrix Mindset
The Achiever Matrix is a useful tool that allows you to identify what tasks take
The OPPS Mindset
All too often we find ourselves in situations where someone needs our help, and we
Seven Ways To Grow Your Business
Learn about the different ways you can grow your business.