How to Maximize the Sale Value of Your Small Business
The number of businesses for sale rose 4.7% in 2022 from 2021, according to BizBuySell’s Insight Report. This is still about 7% lower than pre-pandemic levels in 2019. However the median sale price dropped by about 3% in 2022, so what can you do to maximize your value, if you’re looking to sell?
It’s time to look at those margins—Forbes urges business owners looking to sell to take an honest look at their company and see where they can reduce costs, without damaging the business before a sale.
This can be done in a variety of ways, including looking at business insurance and other contracts, to see where you might be able to reduce costs. Forbes also recommends looking at staffing levels. Could you make cuts? And, finally, work on only buying the inventory you need.
Know Your Assets
Some assets are obvious, while others you might forget to consider. Forbes recommends taking account of any physical assets you have—such as buildings, vehicles, office furniture and servers. You might be surprised at what has value! Your brand, procedures, along with any future revenue streams are all important assets.
Re-Examine Your Prices
Are your current prices reflective of your costs? If not, it might be time to raise your prices! ESOP Partners says you need to be careful about this one—you don’t want customers to leave! But even a small increase could help your margins significantly.
Have A+ Employees
What better way to look like a hot commodity than having great established employees. ESOP Partners says it’s important to keep a strong team on board; you can do that by offering opportunities for growth.
Money isn’t everything
When you’re looking at a business’ sale price, you’re talking about money. But the business value can mean so much more. The Business Transition Academy discusses in its book Cashing Out of Your Business the importance of having a quality and well-run business. Does the business need you to be successful? Are customers coming back year after year? Are you respected in your industry? It is crucial for a prospective buyer to easily see the value a business offers.
You may only get one chance to make an impression on a potential buyer; it’s important to maximize what your business can offer!
We are invested in your success. Contact us today and start maximizing the value of your business!