You’ve built a successful business, with lots of customers, a solid team of employees and profits that help you earn a comfortable living. But at some point, you may look to retire, spend more time with family or just move on to doing something different. Your company is valuable and after many years of effort building it, you’ll want to get the highest possible price from a buyer. So how do you ensure you maximize your business’s value? Wouldn’t it take years to make changes that would result in a higher valuation? Not necessarily. There are things you can do to demonstrate to a buyer the tremendous potential your business has for growth in revenue and profits.
Build A Large Sales Pipeline. The right marketing message can make a significant difference in attracting new customers, and targeting the right prospects is key to building your pipeline. Try to segment your existing customer base and determine which segments have the most potential. Focus your marketing initiatives on these segments by working with delighted customers to help tell their story. Talk to these customers, learn more about why they selected your company and ask them to participate in a case study that features their success after working with you. These success stories will help you fill your sales funnel with new leads for your sales team, demonstrating additional growth potential.
Create Efficiencies and Reduce Costs. Growing revenue will almost always increase the value of a business. However, you can also increase its value by improving profits, even with static revenue. Look for ways to streamline your operation. Are there manual processes your employees are doing daily that could be automated? Is there time wasted by requiring reporting to management when you could empower front line staff to handle issues themselves? Would more detailed, more frequent communications with customers improve satisfaction and reduce support needs? Can you revisit your vendor contracts to see where you may be able to get better pricing? These are some of the questions you should be asking to find areas of improvement.
Get an Assessment. Let’s say you run a manufacturing business with a large plant filled with machinery that assembles your products. Your machinery and production lines run smoothly every day, however, they are fairly dated and don’t provide feedback during operations. In today’s manufacturing environments, real time data is critical. Smart manufacturing is the use of IoT devices to improve the efficiency and productivity of manufacturing operations. Typically, this involves retrofitting sensors to existing manufacturing equipment, but new manufacturing equipment often comes with IoT sensors pre-installed. Getting an assessment of your operation by an expert manufacturing consultant will help you understand what changes can be made to improve your business. Even if you don’t make the changes, just having a detailed proposal will show a buyer you understand what can be done to compete more effectively.
There are many things you can do to improve your business valuation, and some are easy to identify. If you need help getting started, consider hiring an advisor with experience working with business owners preparing for a sale, so you can maximize your business valuation.
What do you think? Do you see opportunities for improvement in your business or have other ideas to share? Touch base with Pete to let him know your thoughts.