Increase The Value Of Your Business

If you’re planning to exit, now is the time to prepare your business

How can you increase the value of your business, starting right now?

We’ve had a lot of people using the valuation calculator tool on this site over the last month or so. Some business owners we’ve spoken to, who are planning to exit in the future, have asked for advice on ways to increase the value of their company. Obviously, this takes time and effort (and it’s a huge subject to squeeze into a blog!), but it can be done with careful planning, a good team and sharp focus on the end goal.

Here are a few suggestions on areas to consider:

  1. Find the best advisors
    Build a network of expert advisors around you who have the best interests of you and your company at heart. Selling your business is a major life event and you’ll need help to ensure you get what you want from the deal.
  2. Increase your profits
    Don’t expect high offers if you’re only breaking even, and don’t take too much money out of the business. Good retained earnings on your balance sheet—the portion of the net income that hasn’t been distributed to the shareholders—indicates to buyers that the business has been profitable and is healthy.
  3. Nurture your clients
    A diverse customer base which generates regular, contracted revenues is also hugely attractive to potential buyers. It shows stability and enables more accurate forecasting.
  4. Reduce your expenses
    Analyse your processes and look for ways to increase operational efficiency, cut costs and control inventory without affecting your operations. Brush up your marketing plan and find ways of boosting sales including tapping new markets or offering new products and services.
  5. Rinse and repeat
    Having processes in place which are repeatable and easy for others to understand will help to reassure buyers that your business can still thrive without you.
  6. Strengthen your management team
    Even if you plan to stay around for a while post-sale, empower your team and focus especially on your management team. A strong tier of management adds value to your business.
  7. Have clear plans and goals
    Clear business and marketing plans, with measurable goals, will give your business credibility and emphasises that it has long term potential for growth.
  8. Set yourself apart
    Be clear on your niche and differentiate yourself from your competitors. Even the smallest detail can make your business stand out from the crowd and shows buyers that you have focus.
  9. Keep moving forwards
    It might be tempting to put plans and developments on hold once you’ve committed to exiting your business, but it’s hugely counterproductive. Keep enhancing your processes, premises and people otherwise you’ll fall behind the competition. Don’t let the business go stale or the cashflow to dry up. Buyers want to see a thriving, vibrant company and not one that looks like it’s given up.
  10. Tighten up your reporting
    Good financial reporting and operational paperwork may not add directly to your company’s value, but if they’re accurate and in order it will instantly create a good first impression of your business. Sketchy documentation suggests that your company may have hidden skeletons and no buyer wants a nasty surprise during the sale process.

If this is a subject which interests you, watch this space. We’ll be adding more resources to our site and covering this in detail over the next few weeks.

If you’d like to use the business valuation calculator click here:

At Fidelis, we are always pleased to hear from business owners who are looking to sell or exit their business. Wherever you are in the process, for a confidential, no obligation discussion please get in touch.

Contact details:

Telephone: 0161 410 7070


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