How do you convince buyers that your business is worth as much as you think?

Bolstering the value of your business is an essential responsibility that any good entrepreneur must take care of, yet it’s easier said than done. After all, if improving the value of your business was easy, almost every entrepreneur would be a millionaire. Despite the difficulties associated with increasing the value of your business, it can be achieved by following a winner’s playbook and relying on tried-and-tested methods that have served others well in the past.

Here are seven steps to take in order to increase the value of your business, and what else you should do before you sell your company or foray into a new market.

Focus on developing your human capital

A company is nothing more than the sum of its human capital – if you don’t have talented workers helping you run the show, you can’t hope to raise the value of your business by any measurable sum.

By paying close attention to the needs and wants of your employees, including not only your executive team but also your rank-and-file workers, you’re putting yourself on the path towards sustainable growth and immense business value. Nevertheless, like raising the value of your business overall, bolstering your human capital isn’t always easy – so where should you begin?

Investing in human capital really means investing in humans – that is, the everyday wellbeing of your workers. Providing workers with health insurance shouldn’t be viewed as an unnecessary expense, for instance, but rather as a means by which to solidify their loyalty to your company and bolster their long-term health, thereby ensuring your labour force will always be in stellar shape. The Harvard Business Review makes an excellent case for investing more in people which every business owner should read.

You can’t stop there, however. Developing the potential of your workers is only the first step towards increasing the value of your business before you sell it to another entrepreneur or foray into a new industry.

Have a long-term strategic plan

Most business guides will tell you the obvious – you need to improve your margins, or produce a bigger gap between the sales price and cost to make a product. This advice is hardly practical, as it’s effectively the same thing as saying, “you should run your business better.” Every entrepreneur knows that they need to improve their margins! The question is how you go about doing it effectively, and for that, you need a comprehensive, long-term strategic plan.

Also Read: A customer-centric and cross-channel approach to payments will drive growth for your business

This is particularly important if you intend to sell your business to another entrepreneur. After all, this prospective new business owner will want to know how they can leverage your company’s operations to turn a future profit, and for that, they’ll want a roadmap provided by none other than the current owner – you. Improving your strategic planning is an essential step on the road towards greater profitability and higher business value, so don’t overlook this aspect of bolstering your business.

Strive to create a popular brand

Some businesses achieve success without developing popular, well-known brands for themselves, proving that not everyone needs a mascot. In reality, however, most companies would greatly benefit from having a more popular brand, so focusing on improving your company’s PR and the methods by which you spread your message to a target audience will greatly expedite your success. If you want to achieve a net worth like George Soros that would make any other entrepreneur jealous, you’ll have to focus on standing apart from the crowd in the midst of a jam-packed marketplace.

Forge repeatable processes that will endure when you’re gone

Forging repeatable processes is the next step towards developing the long-term value of your business. This tip is particularly important for those looking to sell their business to another after raising its value. If the methods by which your business has attained success aren’t teachable and repeatable, future business owners will want nothing to do with your commercial empire regardless of how presently impressive it may be. It’s thus imperative to focus on repeatable processes which newcomers to your business can easily learn even after you’ve departed from its daily operations.

Improve your physical facilities

There are two major reasons that you want to improve your business’ physical facilities if you want to increase its value over time. First and foremost, tidy business premises lure in more potential investors and demand higher prices when a sale is made. Second, improving your physical facilities bolsters the value of the land your business owns and lures in more customers and talented employees than dimly-lit, shoddy looking lots that are ugly to look upon.

Also Read: 5 things I learned from talking to 50 VCs

Nobody wants to stop at a lemonade stand created from rotting wooden planks that have rusted nails sticking out from the sign. Similarly, no real investor wants to scoop up a business that looks ugly and predicts failure via its physical repulsiveness. Focus on improving your physical facilities and tidying up before prospective buyers and new workers come in, and your business value will soar.

Show off your most valued assets

When it comes to determining the value of your business, your cash flow and owned assets are crucial. That’s why you should be striving to show off your most valued assets – if you own physical machinery that’s in tip-top shape and will be imperative towards the future profitability of your company, go to great lengths to highlight its impressive features and enduring quality to prospective business buyers.

In addition to wooing over prospective buyers, showing off your valued assets may also help you lure in better human capital – after all, talented workers know a good asset when they see one, and may want to join your company so that they can gain access to your proprietary software or high-quality machinery.

Make it clear value won’t leave when you do

Finally, you have to prove that your business’ value won’t depreciate once you’re gone. The best way to achieve this is to have a stellar staff and plentiful resources to hand off to the new owner. Focus on making it clear that your business has a bright future ahead of it regardless of your presence, and you’ll have heightened its value in no time.

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