The old saying “You have to spend money in order to make money” is true and the same principle applies to business. You should create a growth plan for your company if you’re thinking of selling it within 5- 10 years. When you retire or want to sell your business, a plan that is focused on your company’s success will be a boon.
Before you sell your business, there are many ways to increase business value before a business sale. Here are some areas that can help increase the business’s value.
Increase Business Value Before A Business Sale By Investing Wisely In Marketing
You know how important it is to invest in marketing as a business owner. Your website, digital marketing and traditional marketing are all important. Increased business is usually achieved by investing in the best areas of communication and marketing which can lead to higher profits and increase business value before a business sale.
Which types of marketing are best to increase your company’s value? The best investment in your company’s future is digital marketing. Marketing is a great way to grow your business’s value.
What Marketing is Able to do For Your Business?
Marketing can increase your client base and revenue. You should look at all types of marketing when looking to invest in the market. Also, invest in ongoing marketing to increase your business’s value.
The ongoing value of a newspaper ad or billboard ad is very low. Although you may be able to increase your company’s awareness, the value of the billboard or ad in the paper is minimal. Which types of marketing create ongoing value that can be a business asset and increase your company’s bottom line?
How Can Marketing Be Used to Benefit a Business
After investing time and money, there are many digital marketing options that could become business assets. Your website, social media marketing and search engine optimization (SEO) are all examples of digital assets. Here’s a list of all the types of digital marketing that can help your company and their potential benefits.
Website: A well-designed website that is focused on generating leads and designed properly can be an asset. Your website’s value, effectiveness, and lead generation can be increased by adding to it. You can transform a basic website into a tool for creating leads or streamlining business processes. Your website’s content will provide an ongoing return on your investment.
Search Engine Optimization (SEO): This is an investment that will transform your website’s appearance into a source of ongoing leads. Your business will be worth more if your site ranks high in Google search results. SEO’s ongoing returns are the best thing about it.
Influencer marketing: By becoming an influential figure in your sector, you can have a significant stake and influence the perception of your company. To attract attention, many businesses make weekly videos of their company.
Social media marketing: This is a similar concept to influencer marketing. It’s where a lot the influencing happens. You might be comparing a company that has 12,000 social media followers to one with only 12 followers. What business is more valuable and likely to be profitable?
Your Brand is a Business Asset
You can create a digital strategy that focuses on your company’s brand using all the available digital marketing tools. Building your brand will make it easier for you to sell your company in the future.
Returning Clients Can Increase Your Business’ Value
You can only succeed if your clients are happy. Your business will be more valuable if you create a system that encourages customers to return. Your business can become more than chasing new clients. It will be able to generate ongoing revenue from returning clients. Recurring revenue is one of the best ways to increase business value before a business sale and to increase the desirability of your business before listing it for sale.
Ways That Returning Customers Might Increase Your Business’ Value
Although it might seem obvious that repeat customers increase your company’s value through their sales, keeping track of these clients will give you a tangible asset. You can use this data to predict recurring sales if you keep track of clients. Which clients make ongoing purchases and return clients.
Marketing is an asset for a company that leads to new business, and customer service is an asset for recurring sales. A breakdown of new and recurring business sales can help you to decide if your company is worth selling. You will get more repeat clients the more you sell your business. Your company will be more attractive to buyers if you have more recurring revenue each year.
You Can Improve The Value of Your Company by Investing in Streamlining Processes
Sales growth is the first actionable way to improve your business’ value. You may also know that increasing sales means more work which can eventually lead to more people or less time. You can save your time by looking at how processes could be improved and streamlined. This will increase your productivity and profit and ensure that the business you’re selling is in its best possible condition.
Examining Your Employee’s Work As A Business Asset
Your industry will make it easier for potential buyers to find your company. Your ability to show how your production has improved over the past years will make you a major selling point. Anyone looking to purchase a business will find this information invaluable.
Training Your Employees Will Make Your Business More Profitable
There is no better way to improve productivity and work flow within your company than investing in your people. Business owners often say that their greatest asset is their employees. Your business’s value can be increased by investing in the education and training of your employees. It is an intangible resource that your business can not quantify when it comes to selling the business. However, investing in your employees will ensure your company’s success over time.
You can make your company more productive by creating an employee training program. Some employees might leave your company when you sell it. You can make sure that your business continues to be a success by creating a training program. Your business will grow and become a lasting legacy by investing in the future. (Should I delete this?)
Investing in Appreciating Assets Benefits Financial Growth
Profits from a business are always good for investing in the company. Make sure that you invest your profits in appreciated assets. These assets can increase your business’ overall value and they are easily sold, making them a worthwhile investment.
Examples of Assets That will Grow in Value
You have a wide range of options to increase business value before a business sale. They are highly likely to improve your company’s value, but they can also be greatly influenced by market conditions.
Real estate: It’s more than buying land. You can buy the office, warehouse or other buildings that you already own, as well as all real property you have which you can fix up and preserve to improve your company’s value.
Stocks: Although the stock market is a volatile investment, it can provide a steady return.
Private equity: You can benefit from investing in companies and ventures that are similar to yours. A white-glove transport company might be an option if your antique furniture business requires that the furniture be transported to different locations.
Savings Accounts: While savings accounts may have low returns on investments, they also come with low risks. A savings account that offers a high interest rate will help you to appreciate your money.
Expansion For Increased Profitability
You can grow your business’ by increasing productivity, revenue and leads through many of these steps we have talked about. Expanding your market at some point will also help add value to your business. If possible, expand into additional areas by increasing your service area or adding additional units. If you are a restaurant, adding an additional unit or expanding with food trucks can also increase business value before a business sale. The more units you have within your portfolio, the more valuable and desirable it will be upon sale.
Save Money By Paying Off Debt.
The amount of debt you have owed to your company will be a significant factor in the business’s valuation. These debts will often need to be paid during the business sale. While there are many factors that can impact this decision, the bottom line is that paying your debts to your company will increase your profit margin when your business sells.
Invest In Additional Businesses To Make Your Business More Profitable
Why would you invest in additional businesses if your business is in future sale? You can increase the value of your business by investing in certain types of businesses. For example, buy a company in your field with an impressive online presence if your digital marketing is lacking. To make your company more complete, you can combine that with your existing business strength to create a strong asset.Â
You can combine your successful business and another one to increase your effectiveness. You can apply the strategies of a business that is more successful in certain areas to your own business. You can increase profits by combining the strengths of both companies and enhancing their effectiveness.
Create a Plan to Increase Your Business Value Before A Business Sale
You need to take into account multiple factors when planning to sell or increase the value of your business.
Timeline: You have time to grow your business if you set a 10-year goal for increasing the value of your company and then selling it within eleven years. There is a limit to how much growth you can manage if your goal is to sell the business in five years. The first step in making a business plan is to determine your time frame.
Current Assets: An inventory of all your assets will help you determine where to invest for your company’s future growth.
Which Assets Do You Want to Increase? After reviewing your assets, consider the above suggestions and decide what your company would like.
What Assets Does Your Business Have The Most Potential To Buy? Review the assets that you are looking to acquire or increase within your company. What assets can you handle for your company? Is there a quick way to increase your company’s profitability?
Where to Start: Decide where you want to begin. Ask where you can start. Talking to your most senior employees can be a great place to start. To make your business grow, you need to share your goals with the team.
Put Money Into the Areas Of Your Business That Are The Most Successful
Consider investing 20% in the most profitable areas of your business when you begin to invest in it for growth and development. The highest returns on your investment will be achieved by investing in the top 20% of your company’s most lucrative areas. These areas can be used to generate a return on your time and investment.
If You Take Your Time, Small Changes Can be Made in Your Business
Small changes can sometimes bring about the highest return on your investment. No matter how large or small your initiative, saving money and increasing revenues are all benefits.
Are You Looking to Sell Your Business?
A business valuation is crucial if you’re considering selling your business. Mission Peak Brokers can maximize your company’s sale price. Get in touch with us to learn more.
