A valuable business is a sellable business, but value creation shouldn’t be left until you’re ready to sell – it should be built into your business plan.
Work now on building value into the heart of your business and when it’s time to sell, you’ll get the price you need.
We’ve got seven ways that can help.
- Establish Recurring Revenue“Recurring turnover” simply means that you have clients who automatically renew subscriptions or contracts with you on a regular basis. You can do this even if this isn’t the norm in your industry.Find something that you can sell to clients on an ongoing basis, and you’ll be more valuable than your competition to potential buyers.
- Be Able to Show “Clean Books”Get your books reviewed professionally every year or do audited statements if they’re the norm. When you can show potential buyers that you have clean books and that you hold yourself accountable to outside professionals – not just an internal bookkeeper – you’ll boost your business’ value.
- Prepare One or More Trusted Employees to Stand In For You Train one or more of your employees to do your job when you’re not there, and plan to have them stay on when you sell. It will improve the value of your business at time of sale, because those employees will have the expertise and training to keep the business running smoothly once it passes into new hands.
- Demonstrate that Customers are Happy If you can actually demonstrate that your customers are happy, and that they’ll continue to support your business as applicable, you can justifiably boost your business’ selling price. Do surveys and track usage statistics, for example, and/or simply ask them.
- Diversify Your Client Base and Choice of Vendors Make sure that no more than 10% of your business comes through a single client or customer. Potential buyers will pay much more for a business with a diversified customer or client base because it greatly enhances the chance of continued success.Similarly, being able to depend on more than one vendor for crucial supplies means you won’t be suddenly caught short if your vendor goes out of business.
- Build your Brand In other words, distinguish yourself from your competition so that you stand out. If your brand is recognisable and that recognition is positive, you’ve established your value.
- Get a Pitch Ready Now Even if you don’t think you want to sell now, you still need to be ready “just in case.” Why? Because if the opportunity to sell for a good price should suddenly arise, you want to have the option to choose whether to turn it down or to sell, not be forced to turn it down because you’re not prepared for the opportunity even if you would sell.Your pitch should be no more than a couple of minutes long, so that you can quickly present it to a prospective buyer whenever and wherever the opportunity arises.
If you’re ready to start today, why not download our free guide with 11 Ways to Build Sellability into Your Business?