How to Increase Your Business’s Value Before Selling It

How to Increase Your Business's Value Before Selling It

   When you are selling your business, you want to ensure you get the best price. For many business owners, this can require some work before listing the business, where you can increase its value to ensure you aren’t missing out on any profits. But how do you improve your business value before listing it? Finding the answers to this question can be tricky, leaving many business owners overwhelmed and confused, unsure where to turn or who to trust. That is where we come in, with our expert tips to help you increase the value of your business before selling, ensuring you get the best price.

Optimise Your Finances and Operations 

   No one wants to buy a business with finances and operations in a mess, so spend some time optimising them before listing your business. What is required to do this will vary depending on the type of business and its current finances and operations, but there are a few key ways that most businesses can do this, including: 

• Improving profitability – cutting non-essential expenses will help to increase margins, and you might want to consider increasing prices to enhance your profitability 

• Clean up financials – ensuring that your financials are accurate and up to date. You might want to employ an accountant to help with this if needed 

• Boost your cash flow –  by managing inventory efficiently and speeding up any collections to improve your working capital 
• Secure IP – having a secure IP will protect all intellectual property, including domain names, trademarks, and patents, ensuring your business’s interests are protected

   You might want to consider hiring an expert to help with your finances and operations, too, especially if they aren’t optimised, and you aren’t sure where to begin. Spending some time understanding your current financials and how your business operates is key to identifying areas you can tighten or address to make your business more profitable and attractive to buyers. 

Risk Mitigation and Growth 

   Every business has risks it needs to mitigate, and you must be aware of yours to facilitate a smooth sale. For your business to reach its full sales potential, there needs to be a clear path for growth, or growth evident and proof that risks have been mitigated, making it easier for the new owners to slip into the running of the business. The following can be done to achieve this before your business is valued: 

• Showcase growth potential – through a documented growth plan for the next ten years, covering new products, market expansion, and other ways you plan to grow the business

• Build recurring revenue – through long-term contracts or subscription models that will provide stable and predictable income 

• Diversify supplier/customer base – to ensure that no single supplier or client accounts for a high percentage of revenue, reducing the risk if you stop doing business with them 

• Reduce owner dependency – by empowering our team to run operations, allowing the business to thrive after you leave 

Brand and Market Position 

   You must understand your market position and adjust your brand or branding as needed to stay ahead of the competition. Potential buyers will pay more for a business with a robust marketing department and strategy, especially one that can target and beat competitors in your industry. To ensure your business gets the best valuation, you can: 

• Monitor competition – assessing what works for your competitors, how you can tailor your marketing, focusing on your USPs that set your business apart

• Leverage customer loyalty – with loyalty programs and encourage positive reviews to prove high customer satisfaction 

• Strengthen your brand – investing in marketing, improving your online presence, and updating your website 

   You might want to work with a marketing team or brand advisers to help adjust your brand and market position if you don’t have an in-house team to do this. Having a stronger understanding of your brand and market position can help boost customer loyalty and sales, making your business more profitable and more valuable. 

Value Your Business With a Business Broker Today 

   After taking steps to increase your business’s value, you should have it appraised by an expert business broker to see what it could sell for. Business brokers will provide a fair price for your business and can often offer suggestions to help you get a better price. Brokers like Benchmark Business Brokers have experts in virtually every industry, with a deep understanding of the market, allowing them to provide accurate valuations and connect you with potential buyers for your business. Contact Benchmark Business brokers to see how they could help you today.