6 Little Things that Make a Big Difference to Your Company Value
Value Builder Assessment
When it comes to selling your business, markets can be cruel. A Value Builder Assessment is critical. Get everything right, and you can successfully sell your business for a premium. Misjudge a couple of minor details and a buyer can walk, leaving you with nothing.
Here is a list of six little details to get right prior to putting your business on the market:
Value Builder List
- Find your lease. If you rent space, you may be required to notify your landlord if you intend to sell your company. Read through the fine print and ensure you’re not scrambling at the last minute to seek permission from your landlord to sell.
- Professionalize your books. Consider having audited financial statements prepared to give a buyer confidence in your bookkeeping.
- Stop using your company as an ATM. Many business owners run trips and other perks through their business, but if you’re planning to sell, these treats will artificially depress your earnings, which will reduce the value of your company in the eyes of a buyer by much more than the value of the perks.
- Protect your gross margin. When leading up to being listed for sale, companies grow by chasing low-margin business. You tell yourself you need top-line growth, but when an acquirer sees your growth has come at the expense of your gross margin, she will question your pricing authority and assume your journey to the bottom of the commoditization heap has begun.
- Make sure your contracts include a “survivor clause” stipulating that the obligations of the contract “survive” the change of ownership of your company. That way, your customers can’t use the sale of your company to wiggle out of their commitments to your business. Have a lawyer paper the language to ensure it has teeth in your jurisdiction.
- Get your Value Builder Score. Take 13 minutes to answer the Value Builder questionnaire now. You’ll see how you performed on the eight key drivers of company value and you can identify any gaps you need to fill before taking your business to market.
Selling a business requires preparation
Selling a business can be an all-or-nothing affair. Get it right and you will walk away a winner. Fumble your preparation, and you could end up with nothing.
Do You Know What Your Company is Worth?
Contact DBG Advisors today! Get full value for your company.