It’s safe to assume that any business owner is interested in growing the value of their enterprise, but through conversations with our clients, we’ve found that many are simply unsure of where to begin. While traditional advice states that hiring new people, investing in business coaching, or cutting costs is where the journey must start, there are plenty of other tactics for building your investment. Below, we have some key tips for business owners interested in increasing their businesses value:
Build Transferable Business Value
Transferable business value refers to the value of your business once you leave it—and for many business owners who like to wear all the hats, increasing transferable business value is a great place to start. Distributing high-level roles and responsibilities to key employees ensures that the business can keep moving forward even once you leave it, making it that much more valuable to an objective party.
Prove the Sustainability of Your Business’ Cash Flow
One of the key numbers that any potential business buyers will look at is the cash flow of your business, and they’ll be especially interested in how directly you as an owner influence that cash flow. Any buyer will want to be certain that even if the business changes hands, the current cash flow levels are sustainable. By focusing on the scalability of your operations, the diversity of your customer base, and the growth strategies you have implemented throughout the years, you can showcase exactly how much potential for sustainable growth your business possesses.
Showcase Your Company’s Competitive Advantage
Regardless of what industry your business is in, it’s certain that you have competitors in the space and your customers have a choice for who they do business with. Your competitive advantage is why customers or clients choose you over the rest—and this is a major value increase for any company. Whether your product is better designed, manufactured at a better price, or is just plain more enjoyable to use, showcase whatever it is that makes it your customers’ number one pick.
Start Your Business Exit Plan
Whether you’re planning to retire in the next year or in the next decade, it is never too early to start developing your business exit plan. Having a comprehensive exit plan not only helps you guide your business’ future more effectively, but it will also make the business more attractive to potential buyers when they know you have a well thought out plan in place. Regardless of when you think you’ll be ready to move on, now is the time to start working with a business planner so you can be certain you have the best roadmap in place for your scenario.
Ready to work on your business exit plan? We’re here to help! We’ve helped many business owners prepare to exit their business, and we’d love to help you too. Get in touch to learn more.