Four tips for calculating business value – and why it matters

Most business owners think the value of their business lies in its assets, sales and profits. But professional deal-makers have a different idea of where the value of your business truly resides. If you understand this basic-yet-powerful fact, you place yourself among the most elite of sellers.

That’s because, by knowing what professional buyers want, you can begin today to plan and shape your company for its eventual sale. Even if you are not going to sell your business for decades, you need to begin planning for that event now. Otherwise, when it comes time to sell, you will discover all of the things you should have been doing over the years to build value and make your business buyer ready.

What should go into your exit plan? The short answer is anything that increases business value in the eyes of the buyer. Here are four critical things to know about how a buyer sees your business value.

1. Be ready to showcase unexplored opportunities

A buyer is not purchasing your business for what you, the current owner, have been able to do with it. They are buying the company for what they can accomplish after they put their resources into it.

That’s why you should begin by identifying all of the opportunities that the seller could take advantage of in your company. This involves thinking outside of the box.

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