Many business owners don’t give a lot of thought to the value of their company until they start to consider their exit strategy. Selling the business is often the primary strategy for creating liquidity and embarking on their next chapter.

To increase your company’s selling price based on value, you can follow these 10 effective options for growing your business value before you move to sell:

Key Takeaways

  • Get aggressive about increasing sales efforts
  • Invest in branding and marketing support
  • Diversify your client base to address customer concentration
  • Review suppliers and vendors to address supply risks
  • Improve data collection for more accurate projections

How to Increase the Market Value of Your Business

Increasing your business’s market value can be achieved through various tactics. First, make an all-out effort to increase sales by growing your customer base and offering incentives to your sales team. Second, investing in your brand and marketing can help differentiate your company and attract more customers.

Addressing customer concentration by diversifying your client base and minimizing supplier risks can reduce risk and increase your market value. Improving data collection for accurate projections and evaluating pricing can also impact your business value. Additionally, focusing on growing existing customer relationships, building a top-notch team, addressing waste and inefficiencies, and being mindful of overcompensation are strategies that can increase your business’s value.

Implementing these strategies will not only increase the value of your business but also position it for business growth and a successful exit strategy. By maximizing your business value, you can maximize the proceeds when it comes time to sell or transfer ownership of your company.

Maximizing Net Proceeds on the Business Value You’ve Built

To maximize the net proceeds on the business value you’ve built, consider selling to an employee stock ownership plan (ESOP). An ESOP sale can offer tax advantages and flexibility for the seller, allowing them to stay involved with the company while enjoying the benefits of the wealth built. The unique tax benefits of an ESOP can also improve cash flow and support strategies for increasing profitability. By law, an ESOP pays fair market value for a company, but the transaction can still result in favorable proceeds for the selling owner. Selling to an ESOP is one strategic decision to consider when maximizing your business’s value before a sale.

FAQ

What are some methods to boost the value of my business before selling?

Some methods to boost the value of your business before selling include increasing sales efforts, investing in branding and marketing support, diversifying your client base, addressing supply risks with suppliers and vendors, improving data collection, evaluating pricing, focusing on profitable customer relationships, strengthening your team roster, improving profitability through efficiency, and considering whether top salaries should be normalized.

How can I increase the market value of my business?

You can increase the market value of your business by increasing sales efforts, investing in branding and marketing, diversifying your client base, minimizing supplier risks, improving data collection, evaluating pricing, focusing on profitable customer relationships, strengthening your team roster, addressing waste and inefficiencies, and being mindful of overcompensation.

How can I maximize the net proceeds on the business value I’ve built?

One strategy to maximize the net proceeds on the business value you’ve built is to consider selling to an employee stock ownership plan (ESOP). An ESOP sale can offer tax advantages and flexibility for the seller, allowing them to stay involved with the company while enjoying the benefits of the wealth they’ve built. Selling to an ESOP can also improve cash flow and support strategies for increasing profitability.