There are a lot of misconceptions about what enhances the value of a business. The following are aspects of a business that really drive its value.
Value Drivers Are:
1. History And Longevity
Being in business for a long time isnít necessarily a guarantee of a successful business, but itís a good indicator. Having a compelling history behind your business doesnít hurt its value either.
2. Historical Profitability
This one is a no brainer. Being in business for a long time and being profitable is a great combination. Historical profitability gives the buyer confidence in future profitability.
3. Good Books And Records That Are Defendable
We just talked about historical profitability. In order to prove you have been profitable you need to keep good books and financial records that can be verified.
A good reputation is worth its weight in gold. It's an element of the goodwill your business has developed over time and it adds value to it. A good reputation means people know your business and have a positive view of it. That means they are more likely to be repeat customers and recommend your business to friends and family. That could reduce the amount a new owner will need to spend on advertising and marketing and again gives them confidence they are buying a business that will give them a good return on their investment.
5. Location And Accessibility
Is your business ideally located and easily accessible? If not, it could be effecting your bottom line as potential customers decide to go elsewhere and that could affect your businesses value.
6. Staff Tenure
Having a staff both with experience and tenure that is willing to stay on after transition of ownership is priceless. This saves the new owner time and money finding and training new employees.
7. Market Desirability
Is your product or service desired by the public? The more it is the more value your business has.
8. Potential Future Earnings And Growth Opportunities
How much potential does your business have for future growth? The more potential the more value it has to potential buyers.