If this is something you’re interested in pursuing, the article offers a few things to try. For example: 

• Offer superb customer service
• Work on developing your research and development capabilities
• Provide a reliable product
• Build a lengthy and enviable customer list
• Make sure that you have stellar people in key management positions 

Other things that help your company stand out, but that you may not be able to control, include the ease with which other competitors can enter the market and whether your business is the only one of its type in your territory.

If you’d like to increase the value of your business, which is an especially good idea if selling the business is part of your plan, try implementing some of these techniques. Then test your success by contacting a reputable business appraisal firm and asking them to determine the value of your business. 

By: Present Value

Additional reading:

Determining a Business’s Selling Price

Brand Strength Contributes to a Business’s Value

Myth 1 – Valuing a private business should only be done when the business is ready to be sold or a lender requires a valuation as part of its due diligence process.

This isn’t true. Effective financial planning requires regular valuations. Especially if a change in ownership is expected. We’ve written about the different occasions, other than at the time of purchase or sale, when a valuation might be necessary here, here, and here. 

Myth 2 – Businesses in my industry always sell for two times annual revenue (the revenue multiple). So why should I pay someone to value my business?

Often, the numbers you see when determining sale prices in your industry are median sale prices. Your business could have a value much different than the median sale price in your industry. 

Myth 3 – A local competitor sold his business for three times revenue six months ago. My business is worth at least this much!

A lot can happen in six months. Economic conditions can shift quickly and you may be selling your business in a much different environment than your competitor did six months ago.

Myth 4 – How much a business is worth depends on what the valuation is used for.

A business’ worth is determined by its fair market value, which, if determined properly, should be the same no matter what the valuation is used for.

Myth 5 – Your business loses money, so it is not worth much.

Sometimes, it may just appear that your business is losing money. When you take a look at discretionary expenses, you will likely find quite a bit of cash generated by your business.

Don’t believe the myths. Get the facts about your business’ worth with a professional business valuation.

You can read the full article on the SCORE website here.

By: Present Value