Growing a Business

As valuation professionals, we are asked daily: 

“What is the value of my company today?” 

A business valuation can assist you in understanding the value of your business and the potential value drivers to focus on to help build value in your business. This can help you maximize the value by the time you are ready to exit or sell your business.

Initial Considerations

We all understand that if a company decreases its expenses and/or increases revenue, the value of the company increases. When it comes to business valuations, the value of a company is not that simple. Our valuation specialists look at the history of the financials and factors like revenue growth in order to select guideline transaction multiples. Understanding how someone like a valuation specialist views the value will help you see what truly matters. The need to build value and then instituting changes to grow that value is different. We provide you with the value of the business and then point out ways in which to grow your business.

Below are a couple of items that you can implement now in order to increase the value of your business:

• Increase profitability

• • • Identify expenses that are currently incurred that could be easily eliminated or switched out
    • Grow intangible assets
      • This could be through your CRM system or proprietary technology, etc.
    • Increase employee retention
      • Ultimately, the cost of training and replacing can far outweigh paying your employee a higher salary
    • Diversify revenue through new revenue streams
      • This may be more difficult to do, but by understanding the needs of your customers, you can identify new products and services to offer
    • Create your Dream 100 list
      • Identify future prospects in the market and work to ensure that you land them as clients

• Simplify

• • • Systems, systems, systems
      • Establish simple, but detailed systems for the following:
        • Human Resources: how do you search, find, hire, orient, manage, review, promote, retain, and fire people
        • Marketing: how is your message communicated to your target audience leading them to buy your product
        • Sales: how do you convert a lead into a customer
        • Operations: how do you provide your service or make your product for your customer
        • Accounting: what is your current method for tracking the money
        • Customer-retention: how do you take care of your customers

• Organize

• • If you are working with paper, this needs to stop. All the documents should be neatly cataloged through a secured cloud storage

A business valuation expert through the valuation process will point out where you could improve. Ultimately, the primary area that we have seen increase value is in the systems of the company. The more documented these systems are, the more tuned in the hired workforce can execute efficiently. The ability for a potential buyer to inherit these systems is key. While you create these systems, you will personally notice inefficiencies in your company that you can tweek today.

If you would like direction, Peak Business Valuation, offers a complimentary consultation, enabling you to discuss with us your business and how a business valuation might help you grow the business.

Kelli and Ryan Hutchins, co-founders of Peak Business Valuation want to help you grow your business and maximize the value of your company.