Make Your Business More Valuable

Whether you’re looking to sell your company today or sometime in the future, you’ll need to make sure that it’s attractive to buyers. Here’s how you can boost the value of your business.

test

To get maximum value for your business, ensure that no one client is more than 10% of your revenue stream.

Many Canadian businesses are sold on an unsolicited basis – meaning that the owner is not looking to cash in when they are approached with an opportunity to sell. Knowing this, it makes sense to determine what steps you can take to build value into your business today to capitalize on an opportunity in the future.

It helps to put yourself in the position of the buyer, not the seller. Whereas a seller is mainly interested in the price and terms of the sale, the buyer is seeking clarity on a number of topics so they can verify the quality and organization of the business they are considering purchasing.

Here are several ways to make your business more attractive.

  • tip
    tip

    Promote your success

    A buyer wants to invest in a business that is growing. You can promote your success through a targeted advertising campaign and with strategic updates to your company website. Do you have a blog? Infuse it with stories of the history and milestones of your business development. Also consider creating a banner for your home page. It might read, “Celebrating 25 years of growth in the community.”

  • tip
    tip

    Increase your visibility

    You can also make your company more attractive to sellers by enhancing your presence in your industry. Consider participating in trade shows or conferences – something you may have done when your business was newer and less developed.

  • tip
    tip

    Develop your recurring revenue

    Recurring revenue is traditionally valued higher than regular sales or service revenue. That’s why your gym wants you to sign up for at least a one-year membership! If your business doesn’t have recurring revenue, can you see an opportunity to introduce some into your model? It will almost certainly increase the value of your business.

  • tip
    tip

    Don’t put all your eggs in one basket

    To get maximum value for your business, ensure that no one client is more than 10% of your revenue stream. If this isn’t possible, try to diversify the product(s) you are selling. This rule of thumb also applies on the supplier side. What might happen to your product or service if you have only one or two suppliers? The health of your business then depends on the health of theirs. If they close up shop, or their product or process becomes obsolete, your business could suffer.

  • tip
    tip

    Have a succession plan

    If you are looking to sell your company, you need to be aware that not everyone who buys a business wants to be CEO or in charge of the day-to-day operations. The strength of your team, and their loyalty and experience, can be important elements in the value of your company and can expand your buyer market. Good succession planning ensures that superior employees are developed to prepare them for promotion to more challenging roles. Taking the time to mentor people now will pay off in the future – whether you sell your business or not.

    Some owners stay on the job after they sell, to help with the transition. This can often mitigate risk; however, an unforeseen medical event can take you away from your business at anytime. This reality makes planning all the more important, to ensure you have good people to step in and run the show.

Have Questions

Our advisors will consider your financial goals and help find the path to get you there.

Find an Advisor