5 ways to increase the value of your business – even if you are not selling.

Increasing the value of your business can only be a positive move. The rule of thumb is that the longer you have to prepare, the more control you have over the value of your company…

Here are 5 key tips that will help you build the value in your business until such a point you are ready to sell…

One of the most important ways to increase the value of your business and its attractiveness to potential future buyers is to keep a comprehensive, well documented and regularly updated list of the below financials:

1. Increasing Profitability – Increasing your company’s profitability will increase its value and in turn result in future buyers being willing to pay more for a company that can generate a profit and demonstrate that these profits are still increasing.

2. Recurring Revenue – Building recurring revenue streams will increase the value of your business and reduce risk. Recurring revenue will give potential buyers comfort that they will have a consistent revenue flow while they get acclimated to the new business.

3. Diversification – Whether it’s about your products, customers or suppliers, it is important to always diversify your business. A concentration of revenue is a recipe for disaster; however, diversification reduces these reliance’s and in turn reduces the risk for yourself and potential buyers.

4. Robust Financial Controls – Running a well-managed, healthy business requires the use of strong financial controls. A business needs to be on top of its revenue sources, expenses, cash flow, etc. If you don’t know where your money is going, it could soon be gone, so regularly assessing and strengthening these where necessary is a must.

5. Create a Documented Business Plan for Growth - Always have a comprehensive business plan and keep it current. Even if you are not thinking of exiting your business anytime soon, the further one plans ahead, the more time you have to grow and enhance the value of your business. That is why it is important that your business plan should include a list of objectives and detailed financial projections of the company’s goals for future success. It’s all about giving yourself and your employees an understanding about where your company’s growth is coming from, documenting this in writing and continuing to refine and measure the results accordingly.

If you are interested in finding out more about each stage of increasing the value of your business, speak to one of our experts at BuyMyBiz.