What would entice someone to make you BIG offer to purchase your business?
Besides making cash-flow profit – another potential benefit is a large CAPITAL GAIN when you go to sell your business.
However – many small businesses are not worth anything.
Long hours and a low hourly rate (often much less than what the employees earn) make most small businesses unattractive to a potential buyer.
So, what actually makes a good (attractive) business?
- The owner earns (draws) a decent salary from the business ($60,000 to $100,000).
- After all expenses and the owner’s salary, the business produces a profit.
After these main two factors, there are other valuable intangibles like:
- A large customer or client database.
- Medium or long term contracts with clients.
- Good, repeatable, profitable marketing systems.
- Good business systems and a good team (employees).
- Market perceived branding base (that is, the brand is well recognised).
- Inventions, patents, designs, etc.
How to obtain the above for your business?
To make your business more valuable essentially comes down to good marketing and sales strategies and systems. You probably noticed that most of the key ‘value’ drivers listed above fall under sales and marketing. After that, it’s business systems including staff and operations.
I hope you enjoyed this article. I even suggest you copy and paste these key ‘value’ drivers and put them into your business plan. And certainly contact us for help with marketing and sales systems.