If you increase the value of your business you’ll increase the probability that your company will be one of the 25% of companies that go to market that actually sells. This is a huge deal because if you go from not selling to selling your company, that could mean going from zero dollars to hundreds of thousands, if not millions of dollars when you exit the company.
However, there are several other benefits that you may not be aware of. By increasing the value of your business, you have decreased the RISK to business buyers and investors. In doing so, you will have increased the effectiveness and efficiency of the business and the following benefits will also be realized:
You’ll make more money — business buyers are smart. They determine business value and they know what makes a company effective and efficient. If you make your company more effective and efficient, you’ll make more money. Your costs will be less, the product will be developed quicker, you’ll get the bills out faster, and you’ll be paid faster.
Increase the ability to get a bank loan — banks have their own way of measuring a company for a loan. At the very least they will analyze your financial statements. If the bank needs to perform a complete valuation of your company they’ll use the same methodologies that business buyers do.
Make your company sales ready — over the last several years I’ve received dozens of calls from frantic business owners who had to sell their companies. None of these companies were sales ready. Most just closed the doors and liquidated their remaining assets.
You’ll have more discretionary free time — if your company is operating effectively and efficiently you’ll have more time to help grow your business or play golf! How about business free vacations? Or attending seminars or organization meetings without receiving panic-filled phone calls from your office.
Make more money when you cash out — it should be obvious that as you increase business value you also increase the amount of money that you’ll receive when you sell the company. And if you improve the functional areas of the company that your particular buyer type wants, you could receive a premium. But, if your company is not salable to begin with, you could increase that exit money from zero to hundreds of thousands, if not millions of dollars.
The last and perhaps the most important benefit is that you’ll decrease the stress involved in owning a small business. We all know what stress does to your health and well-being.
It makes sense for all small business owners to learn what’s involved in increasing the value of a business. To make this easy for you we’ve developed a FREE workshop that you can access HERE