A business is only worth what a potential buyer is willing to stump up to acquire it. There is quite often a zero or two’s difference between the actual, real world value of an SME and the pub banter valuation that an emotionally invested owner tags onto it. In this article we’ll explore the different ways that you can bolster up the real value of your SME. Value that a potential buyer will actually pay for:
- Increased customer base. A business is essentially as valuable as the clients on its books. If you can substantiate and verify a repeat client base, preferably with client details, it can add massively to the value of your business. Remember, you need to verify your clients and their purchases – so good, clean book keeping is a side requirement of this. Details of every penny ever spent by any customer should be available at your fingertips at a moments notice. The people bidding on your business know only too well, it takes time and capital to build up a quality client list. Money well worth paying for.
- Quality employees. The ultimate buyer of your business is likely to pay a premium when you have a well trained and motivated workforce, all contributing to a positive bottom line. Your employees can be a huge asset to showcase when you do look to sell on your SME. Often, employees can have very specific key skills that are difficult to acquire. Invest in training and building up a good workforce today, and it will pay off in multiples tomorrow when you look to sell up.
- Brand strength. Just how strong is your brand? A potential customer will pay through the nose for a leading brand. If your product is “best in show” then it can be the ace up your sleeve in courting outrageously high offers when listing your business for sale. You can start improving your brand authority right away by engaging in stronger online and offline marketing promotions. Creating the perception of strong brand strength is equally important – getting hundreds of Facebook fans, thousands of twitter followers and some positive testimonials and comments can do wonder for perceived brand strength.
- Reputation management. There’s no where to hide. If this article revolves more around finding ways to bolster your business worth, here’s one thing that can rip it apart – negative online comments. Reputation management has become increasingly important to all businesses, even those without a website. Keep tabs on who is talking about your products online, and what they are saying. Deal with negative reviews or comments quickly, before they become crippling and almost self fulfilling.
- Bolster your assets & technology use. If your business relies heavily on equipment and machinery, consider investment in capital to make your business more cutting edge. Aside from raising the inherent value of your business, investing in capital can serve up a volley of additional benefits such as providing increased efficiency and inducing cost savings.
At the end of the day, a potential buyer is more likely to meet your business valuation if the sum of the parts add up or near to the whole – implementing the above strategies can really help to raise the value of your business in the eyes of a potential purchaser.