How to Make Your Business Worth More Today

As a business owner you want to make your business worth more for your future financial security. There are many ways to value your business and each one has its benefits and weaknesses.  Knowing which one is best for you puts you ahead of the competition.

Why are there different ways to value your business and what are methods used?

The most common methods used in professional M&A firms (including banking, private equity etc.) are:

• EBITDA (earnings) multiple

• Revenue multiple

• Discounted Cash Flow

• Precedent Transactions (consensus price based on other similar transactions)

A business with recurring revenues and high customer loyalty has a higher future value than one that has one-off purchases and must constantly source new customers, even if they both have the same EBITDA for the last 3 years.  Thus, different valuation methods are used.

Making Your Business Worth More

Understanding how your business is valued by potential buyers gives you a head start in the sale process because you can prepare your business accordingly.  Valuing your business using a different valuation method to your buyers sets you on the wrong path, with unrealistic expectations.  Knowing what buyers in your industry look for means you have insights that put you ahead of other sellers.  Or it may even get you looking outside your industry and into other sectors for a buyer who is looking for a break into your industry sector or who operates in a complementary space.

I’m not going to go into the details of valuation methods here.  That’s worthy of an entire book.

The truth is you shouldn’t have to worry about every aspect of the process. You’ve been busy building your business, not learning to become an M&A (mergers and acquisitions), legal and corporate finance specialist.  Here I just want to eliminate some uncertainty and make sure you have the tools and knowledge to enable your business to thrive into the future.

Want to Make Your Business Worth More?

Is your business saleable and exit ready for you to leave it (no matter when it happens)? Click to to get Christine’s free Exit Ready Checklist the expert in making sure your business is saleable for more money and on better terms.   Christine helps you get out of the day-to-day, guides you through the handover of controls and gets you and your businesses exit ready so you can enjoy a happier, richer future.  She saves you THOUSANDS so you can increase the value of your businesses by MILLIONS.