How to Increase the Value of Your Business Before You Sell
One of the most important goals you set involves increasing the value of your business. Whether you are considering acquiring another company or planning a strategy to boost future growth, increasing the value of your business should be a primary financial objective.
This is especially true if you are planning to sell your business. When you increase the value of your business before a sale, you improve the chance of enjoying a substantial financial windfall. The question is not should you increase the value of your business before a sale. Instead, you should ask what steps you need to take to maximize value when selling your business.
Take the First Step: Understand What Your Business is Worth
You cannot expect to boost the value of your business if you do not know how much your business is worth. Understanding the current value of your business involves targeting key growth areas, analyzing sales performance, and making future short-term financial estimates. Understanding the value of your business gives you a financial foundation to increase value before you consummate a sale.
Here are some other factors that determine the value of your business:
- Profit
- Cash flow
- Revenue
- Fixed Assets
- Book value
- Market value
Improve Cash Flow
Any prospective buyer of your business wants to see a healthy cash flow. A strong cash flow gives you the flexibility to move money around to grow your business. Not only do business brokers want to verify your strong cash flow position, but they also want to see annual increases in cash flow since you started your business. A healthy cash flow that increases each year indicates a business is financially strong enough to seek growth opportunities.
Own Your Niche
Another one of your goals is to become the leader of your business niche. For example, if you own a fencing company in South Florida, you want to be recognized as the best fencing company in the entire area. Investors, business brokers, and potential individual buyers add value to a business that owns its niche. Owning your niche means your business can attract more customers, as well as recruit and retain the most talented workers in your market.
Deliver the Best Customer Service
Selling your business involves demonstrating to investors and business brokers that you are the leader in providing friendly, efficient, and knowledgeable customer service. Delivering superior customer service increases the value of your company because the best customer service attracts more regular customers, which increases revenue and profits. You can always improve customer service, which means when selling your business, you have to show a prospective buyer that your business has the systems in place to take care of customers. The superior customer service you provide should meet the needs of a highly diverse base of customers.
Sunbelt Business Brokers sells more businesses than anyone else in the world. We offer custom deal structures, dedicated financial advisors, and compelling marketing assets that get our customers the best price for their business. Sunbelt takes the time required to pre-screen every buyer by establishing a profile and receiving a Personal Financial Statement (PFS). Because we do the original legwork, you get a head start on selling your business.
Contact Sunbelt Business Brokers of Naples for a free valuation & consultation.