Every day, more than 10,000 baby boomers are reaching retirement age, and many business owners in this group plan to use the sales of their businesses to fund a significant portion of their retirements. Having a defined strategy in place enhances the ability of these business owners to receive the maximum value from the sale of their businesses.
Having conducted hundreds of business valuations of various companies in multiple industries for a variety of purposes over the years, Rob Metcalf has compiled a list of five value drivers that a business owner like you can implement to increase the value of your business:
- Assess current business fundamentals to reduce your exposure to risk of loss. You can do this by analyzing ownership rights and responsibilities, facility management, contingency planning, insurance contracts and legal documentation.
- Perform strategic planning to enhance business drivers such as: diversifying your customer base, adding markets and/or products, expanding sales to current customers, setting goals and holding people accountable, creating a consistent sales and marketing message, investing in your business and your people and minimizing taxes.
- Evaluate and standardize your internal operations to improve efficiency and cash flows.
- Establish or improve a management team and develop incentive programs to retain and motivate key employees.
- Benchmark with the aim of improving the financial strength of your business in the areas of liquidity, activity, leverage and profitability.
Whether you want to sell your business in a couple of years or 10 years, it’s important to focus on the drivers that help to increase the value of your business. The better your performance is in these areas, the greater the selling price of your business will generally be.
For more information on MarksNelson’s business valuation services, or to discuss how to increase your business’ value further, contact Rob Metcalf, CPA/ABV/CFF, CVA, CBA, ASA, MAFF, or your MarksNelson professional today.
Any tax advice contained in this communication (whether distributed by mail, e-mail, fax, or other means) is not intended or written to be used, and cannot be used, by any person for the purposes of avoiding any penalties that may be imposed by any government taxing authority or agency, or for promoting, marketing or recommending to another party any tax-related matter addressed herein.