5 simple things that can increase the value of your business

When selling your firm, making sure that you receive the amount of money that you think your business is worth is incredibly important.

This is especially so, given that a recent report by International Adviser revealed that 72% of advice firms feel that acquirers undervalue their businesses.

While you may want to leave your business in the best possible hands, you need to consider how much money you will need to generate from the sale to do everything you want to after you’ve left.

Thankfully, there are a few simple things you can do to try and increase your business’s value. While many are finance-based, some will also help you improve the perception of your company in the process.

So, read on to find out five simple things you can do to increase the value of your business.

1. Identify and understand your business’s current value

To make sure that you receive the amount of money you believe your firm is worth, and enough for you to do everything you have planned, you will need to work out an accurate, and current, valuation of your business.

As well as calculating your ongoing adviser charges (OAC) and looking at the value of your Assets Under Management (AUM), there are a multitude of aspects that can change the value of your business, so working with experienced professionals will save you time and money.

2. Try and improve your profits

If your business remains profitable in the years running up to a sale, it will most likely be more attractive to a potential buyer.

Quite simply, a healthy profit, or more precisely, earnings before interest, taxes, depreciation, and amortisation (EBITDA), indicates that your business is probably performing well and is potentially going to be a worthwhile investment. Aside from the potential financial benefits, a consistent EBITDA also highlights a happy client base.

Maximising your profit and AUM will not only be more likely to attract interest in your firm but will make it easier for you to accurately value your firm, too.

3. Focus on customer service

Having a strong and consistent client base is another highly effective way of making your firm more valuable to potential buyers.

Knowing that the business they are buying has a strong foundation for success and a regular, predictable income from existing clients means buyers may be more likely to put in a strong offer and meet your valuation.

So, before the sale, it is important to provide a consistent level of customer service to keep your existing clients happy (you could potentially evidence this through a system like VouchedFor, perhaps?)

4. Make sure you and the business are fully prepared for a sale

Before selling, it’s important to be sure that you’re making the right decision and aren’t acting rashly or hastily.

Firstly, make sure that you’re not feeling rushed to sell. Second, it’s essential that you, your firm, and your staff are in the right frame of mind before any deal is finalised.

Additionally, it could also be worth addressing any of your weaknesses before negotiating a sale. Doing so may give you the opportunity to increase the purchase price.

As it can sometimes be difficult to view your firm objectively, you could ask customers and employees for their opinions on how you might improve your business.

5. Work with experienced exit specialists

Experienced exit specialists will assist you in identifying exactly what your firm is worth, how much money you will need to achieve all your financial goals post-sale, and help you understand exactly what is involved in selling.

So, if you’re looking to sell your business, speak with experienced exit specialists. We will help guide you through the entire process, including determining the true valuation of your business.

Email hello@melo.co.uk or call 0113 4656 111.

Please note

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.


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