Do you want to receive top dollar for your business? Do you want to make your business irresistible to a potential buyer? Looking for a stress-free retirement? If you find yourself answering “yes” to these questions, it’s time to take steps to create a transferable business.
The first step? Get a business valuation and find out what your business is worth. More often than not, business owners are surprised their businesses are worth less than they thought. A business valuation expert can give you an accurate picture of your company’s worth, and help you see how its performance compares to other companies in the same or similar industries. Here are five things you can do now to make it more easily transferable later:
- Reduce the risk of high owner dependence. The overall value of the company decreases if owner dependence is high. One way to avoid this is to transfer the owner’s knowledge of the company’s products to others in the business, enabling a more profitable and efficient transition.
- Attract, keep, and retain key employees. You can increase your company’s value if employees are committed to remaining with the company after a sale. Furthermore, skilled employees bring stability to a business, and save costs and time on retraining and hiring.
- Put recurring revenue agreements in place. This will increase the value of your company as it takes pressure off a new owner as they acclimate to the business as it provides a guaranteed revenue stream during new business pursuits.
- Identify cost-cutting strategies and streamline processes to improve efficiency and maximize profits.
- Monitor industry activity and trends within your industry and find opportunities to grow your business. This research can help you determine what potential buyers value in a company.
If you wish to identify ways to make your business more transferable, contact Katherine Whitehead.
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