Whether you are looking to sell your business or looking to buy a business, these five business value drivers should be top of your list. And as you never know when you may need to sell your business always be ahead of the game by implementing these points before you even think about selling as they will benefit your business!
Why? Because they help reduce one of the biggest hindrances to business sales, RISK!
To begin with make your customers happy! Happy customers say more about your business than anything else.
Keep in regular contact with them. Solve issues quickly and listen to your customers.
The more you create a dialogue, the more you learn and the more the customer spends.
Secondly, have exclusive access to intellectual property – patents, trade secrets and trademarks.
All of these points help reduce competition and give you a USP that maintains sales,margins, and ultimately profits.
Furthermore, recurring revenue or making money while you sleep, is a goal of every business.
The more contracted customers you have paying you monthly or annual fees, or return customers coming back to buy again, the more revenue that you have to build on.
Therefore the lower the risk the higher your business valuation will be.
Next is business systemisation This has two major effects.
Firstly it can reduce overall operating costs as it eliminates manual jobs.
Secondly, it means transparency; a third party can review what is going on and see that the business can be run by almost anyone.
Finally, Sack yourself! If you put the business under management, you appeal to many more buyers.
Operating procedures, or an operating manual can help with this and great systems take it a step further.
Investors want business that run under management. Owners want to be able to take vacation.
But if the business is dependant on one person, then the purchaser will see this and see this as a big risk.
So to recap- happy customers, intellectual property, recurring revenue, systemisation and sack yourself!