Six Ways to Improve Your Boston Business’s Value
Preparing to sell your business? You could be leaving money on the table.
Your business’s value depends on many different variables: revenue, profitability, market conditions, and more. But valuation is not set in stone. Depending on your situation, there may be several things you can do to raise your business’s value prior to selling.
As CEO Andy Cagnetta says, “In a perfect world, we would love to talk to all businesses two to three years before selling.”
The earlier you start, the more opportunities you’ll have to raise your business’s value. But if you’re working with less time, don’t worry—you can still make good use of the tips we’ve included below. Here are six straightforward ways to get more bang for your buck, before your business’s appraisal.
1. Keep Good Books
Messy financial records can easily overshadow your business’s best qualities. Prospective buyers see them as liabilities and won’t bite when the risks outweigh the rewards.
“If your business earns well but you hide it through increasing expenses or hiding income,” says Cagnetta. “Someone may say they believe you when you try to go to the market and get the real value…but the banks won’t recognize it and will not finance the transaction.”
It’s never too soon to start cleaning up your books. Mindfully tracking your expenses and cleaning up your balance sheet can improve your business’s value quickly. Need a professional to assist? Transworld – Boston can refer you to a reputable CPA—just contact us for details.
2. Retain Top Talent
Good employees build good businesses. And because hiring new talent can be a costly, time-consuming process, buyers love to see operations with stable staff. It means your business is ready to work right out of the box once the sale is complete.
Retaining dependable, trustworthy employees is also a testament to your good business practices. Your business’s reputation is (in part) defined by employee satisfaction. Low turnover, high morale, and happy teams are all signs you’re doing something right—something buyers will notice.
3. Develop Perfect Protocol
Some business owners take an easygoing, lackadaisical approach to organization…sometimes to the detriment of their professional reputations.
Disorganization (or the appearance of it) can be a big turn-off for potential buyers. Show them you’re serious about your work—and about selling—by creating systems for every aspect of your business. That means developing a systematic approach to everyday tasks, unexpected situations, and even emergencies.
When everything has a process and a place, there’s little room for misunderstanding or confusion. A tidy, well-organized company, whether it’s digital or brick-and-mortar, makes for happy employees, happy customers, and happy buyers.
4. Freshen Up Your Space
Real estate agents know that clean, attractive homes make better first impressions. At Transworld – Boston, our brokers know that the same is true for businesses. That’s why we recommend “freshening up” your business prior to your appraisal.
What does freshening up mean for you? Take a tour of your business and look for quick, easy fixes. New paint, simple repairs, and clean windows can make a big difference in any office, warehouse, or exterior building’s appearance.
Remember, buyers picture themselves sitting in your business. Make it easy for them to imagine that your beautiful, well-kept business is already theirs.
5. Sell Now, Not Later
Strike when the iron is hot—sell when the market is good.
Market demand for your business’s products or services will vary over the course of weeks, months, and even years. Rest assured that the right time to sell will come along…but it may be sooner rather than later. Knowing when is the challenge.
You can do your own research and track trends, or you can outsource the work to a broker. A broker will have the industry-specific resources and historic data needed to determine whether you should wait or move with your sale ASAP. Contact us to learn how Transworld – Boston can help.
6. Don’t Stop Running Your Business
Putting operations on hold is last thing you want to do when preparing to sell your business.
“You must run your business up until the last day of the closing,” Cagnetta warns potential sellers.
Expect the unexpected. The deal may not proceed or close when you expect (and in some cases, it may not close at all), so staying the course is the best choice for business owners preparing to sell.
Focus on creating an upward trend in your profits—and your value—while your broker works out the details. Transworld – Boston can free up your time and help you focus on running your business.
In summary, the best thing you can do for your business’s value is be a mindful business owner.
Think about what potential buyers want out of the transaction, then realistically do what you can to deliver that. Whether it’s a cleaner facility, a well-staffed crew, or flawless bookkeeping, there are many ways to improve your business’s value before you sell—especially with an experienced broker at your side.
Contact us today to learn what we recommend for your unique situation.