6 Ways to Increase the Value of Your Business Before You Sell

The market for buying and selling businesses right now is wild. Businesses are being created, closed, expanded, and sold at a rate much higher than ever before. As a result of the pandemic, many business owners are assessing their own priorities and what the future holds for their company. At staggering rates, owners are listing their businesses for sale.

It is rare for a business to sell quickly. To the contrary, the sale of a company can take months at best – often years. In order to prepare your business for a sale, there are things you can do in order to increase its value. Here are 6 actions you can take right now: 

Create a Forward-Looking Plan

If someone else is going to buy your business, they want reassurance that it will continue to run without you there. The best way to ensure that is to create a realistic, forward-thinking, strong business plan. A strong business plan will not only increase your business’s value, it will also bind your employees together behind proven processes and a unified vision for the future.

Build On Your Profitability

It might go without saying, but the best way to increase your business’s value is to increase its profitability. The higher you can get your income and the lower you can get your expenses, the more desirable your business will be. Focus on recurring forms of income that will be dependable for years to come. Cut corners when you need to – as every business owner knows, every penny counts. On the other hand, growing revenue as much as possible will likely result in a more favorable valuation from a potential buyer than cutting back expenses, so if you have to choose one place to focus your energy, focus on the revenue side of the business.  

Increase Your Profile

One of the best ways to increase your business’s value has little to do with money. Assuming that your venture has a solid reputation, the more people that know about your business, the more likely you will reach an appropriate buyer and get a fair price. This involves raising your public profile (which is sometimes known as your brand awareness.) You can accomplish this through social media, community outreach, breaking into other mediums, and making sure your marketing plan makes sense.

Lock Key Employees In

Employees are frequently a company’s most valuable asset. Even the best business model depends on having an experienced, dependable, trustworthy team to succeed. If you are preparing for a sale, talk about it with your team and try to get commitments ensuring they will not jump ship as soon as the sale goes through.

Lock In Your Key Intellectual Property

Smart buyers are going to ask whether you have adequate brand protection in place (Trademark), your important works have been registered (Copyright), and valuable inventions have been protected (Patents). If you haven’t done this important planning yet, consider developing and implementing an IP strategic plan before you sell.  Experience has taught us it will pay off in the long run by (a) attracting more and better qualified purchasers; and (b) enhancing the value you will receive when you sell.

Get Outside Help

There is only so much that you can do from one perspective on your business. For more information on increasing your business’s value, contact CLARK.LAW. We can help determine whether we would be a good fit to help you.  We also have a robust referral list containing other lawyers, marketing professionals, tax experts and CPAs, business brokers, etc.  We’ll make sure you get the help you need to close a successful sale.

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