SHAUN STENNING BLOG
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If you think a possible exit strategy for your business is to sell it for all its worth, then maximizing its value seems like the smart thing to do. The price your business may fetch has a lot to do with the perceived value of your business in the eyes of the buyer.
Increasing your business value, therefore, is directly correlated to doing the things that will augment the perceived value of perspective buyers. Here are five ways to make your business sellable for the highest price possible. 1. Take a Vacation No, really. Get out of the office. This has two benefits. According to Shaun Stenning, “First, getting away from the “day-to-day” of your business for at least a few days will help you think more strategically about the direction you are headed. Chances are you’ll come back with some new ways to improve your performance, always a boon to business value.” Second, you’ll demonstrate that your business can survive without you (or discover that it cannot, in which case, you may have some work to do). 2. Revenue Recognition How many days between when you get paid by your customers and when you have to pay for the materials, labor, and other inputs directly related to offering your products and services? 3. Increase your EBITDA Short for Earnings Before Interest, Taxes, Depreciation, and Amortization, EBITDA is a quick way to determine the amount of cash flow your operations generate each year in your business. 4. Quantifiable and Validated Sales Cycle A company with a proven process for generating leads along with validated conversion rates of those leads into paying customers is always more attractive to buyers. 5. Sticky Key Managers A buyer will likely plan for the owner to exit within a few years, if not much sooner after they buy a business, but they will want to see that you have built a strong management team that knows how to run, grow, and improve the business on a day-to-day basis. It’s no easy task to build a business, let alone one attractive enough for someone else to buy. But if you want a big payout when you leave your business behind, these five concepts will have you on your way to maximizing the size of that final check.
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AuthorAs an investor, Shaun Stenning makes sure he invests in companies and people who are truly passionate about every day, and making every day an amazing day. Archives
May 2024
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