There are a range of different factors that can affect business value today – and not all of them are internally influenced. However, many have a lot to do with the way the business has been set up and what it offers. If you are looking to sell at any time in the future these 10 things could set your business apart from the competition where value is concerned.

 

  1. A genuine USP. The ‘unique selling point’ idea has been around for a while but it persists as one of the only ways to really ensure your business is more valuable than that of your peers. If your product, service or approach is unique then it will be difficult to replicate and it’s likely to be genuinely appealing to buyers.

  2. Sustainable growth. If you get to the stage where you’re ever looking to sell your business, an acquiring party will be willing to pay more for sustainable growth, particularly if this above the rate of others in your industry.

  3. Innovation and thinking differently. If your business is the hot new proposition on the market that everyone wants a piece of it is likely to be viewed as far more valuable than other enterprises that don’t have the same appeal.

  4. The revenue that makes the biggest difference to value is recurring revenue. This might come from subscriptions or from recurring contracts – any form of regular income that repeats will add to the value perception of the business.

  5. Predictable sales and customer acquisition. A business that has clearly got the right structure in place for generating conversions and acquiring new customers will have an element of predictability that significantly increases its appeal.

  6. The right team. In particular, a highly experienced and competent second in command who is willing to stay on after a transfer of ownership will boost value to most acquirers.

  7. The right location. Whether this is likely to increase value depends on the nature of the business. However, in the right circumstances it can have a big influence. A seafood restaurant, for example, could be considerably more valuable in a scenic location overlooking the sea.

  8. Client and customer diversity. A business with a diverse range of customers or clients will be much more valuable than one that is dependent on a single customer, or even a specific type of customer. To increase value make sure that no single client or customer makes up more than 10% of revenue.

  9. Audited financial statements. Well organised, regularly audited books are transparent and easy to interpret and this will hold considerable value for any potential acquiring party.

  10. The customer base. A healthy customer base that is satisfied and loyal is an incredible asset in terms of business value. Not only are these customers likely to make return purchases but they can act as brand ambassadors for the business too.

 

Whether or not you’re intending to sell your business in the near future it’s always useful to understand which factors are likely to influence value for investors or acquirers.