Patrick Good, Toledo Business Coach with AdviCoach of NW Ohio, offers 5 more ways to make your business more valuable. This is the second in his series where he explains the Sellabililty Score research findings which points to the reasons why businesses in the same industry may have much different valuations when it comes time to sell.
For more information visit Patrick’s website.
5 More Things That Make Your Business More Valuable Than Your Industry Peers
Is your business more valuable than your industry peers? Stay tuned, I’m going to give you 5 more tips to increase your business’s value.
As we learned in my last episode, the value of your company is partly determined by your industry because when we analyze businesses in the same industry, we still see major variations in valuation. Here are 5 more ways to increase the value of your business.
Acquirers pay a premium for companies that naturally hedge the loss of a single customer. Ensure no customer amounts to more than 10 percent of your revenue and your company will be more valuable than an industry peer with just a few big customers.
If you’ve mastered a way to win customers and documented your sales funnel with a predictable set of conversion rates, your secret customer-acquiring formula will make your business more valuable to an acquirer than an industry peer who doesn’t have a clue where their next customer will come from.
3. Clean Books
Companies that invest in audited statements have financials that are generally viewed by acquirers as more trustworthy and therefore worth more. You may want to get your books reviewed professionally each year even if audited statements are not the norm in your industry.
4. A Second in Command
Companies with a second-in-command who has agreed to stay on post sale are more valuable than businesses where all the power and knowledge are in the hands of the owner.
5. Happy Customers
Being able to objectively demonstrate that your customers are happy and intend to re-purchase in the future will make your business more valuable than an industry peer that doesn’t have a means of tracking customer satisfaction.
Your industry typically defines a range of multiples within which your business is likely to sell for; but whether you fall at the bottom or the top of the range comes down to factors that have nothing to do with what you do, but instead, how you do it. I encourage you to visit our website to learn more about how you can increase the sellable value of your business today.
About Toledo Business Coach, Patrick Good
Patrick Good is the Owner of PAG Associates, a Corporation consisting of 5 business units, including AdviCoach of NW Ohio. Pat founded AdviCoach of NW Ohio in 2010. AdviCoach is the nation’s fastest growing business coaching and advisory firm. Pat has an extremely broad business background with over 25 years of experience and success in a wide range of areas including Sales & Marketing, Business Development, Operations, Materials Management, Purchasing, Manufacturing, and Engineering. His extensive business acumen is rooted in his shop-floor manufacturing and production management experience. He has led the Materials, Purchasing, Operations, and Sales functions of local and global companies, including Honeywell International, Midwest Stamping, Kelsey-Hayes, William Cook North America, and Toledo Stamping.
Pat’s background includes certifications in Six Sigma, Lean Manufacturing, Theory of Constraints, and Total Quality Management systems, including Facilitator roles. He is a Lifetime Certified Purchasing Manager and Six Sigma Black Belt.
Watch Pat’s episodes of Toledo Business Coaching: Making Your Success a Reality