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Published On: Tue, Feb 4th, 2020

3 Ways to Make Your Business Valuable

When you started your business, there would have been a reason behind your actions. It could have been that you wanted to see what you could achieve, or that you knew you had a good idea that the world needed to know about. Alternatively, it may have been a longer-term goal; you might have wanted to build something for future generations to be a part of, or you may even have wanted to build a business that you would be able to sell to fund a comfortable retirement. 

If it is this last idea that appeals, you will need to make your business as valuable as possible. There are different ways that this can be done, and it’s not all about the profits you make. Here are some ideas to consider. 

Image by rawpixel from Pixabay

Few Outgoings 

A business that has a lot of outgoings is not going to be as attractive to a potential buyer as one with fewer expenditures and a streamlined cash flow system. The less you are spending on your business in some regards, the better. Although it is always important to have a healthy budget for customer service, marketing, and your IT systems, for example, other elements can be reduced, thus allowing for greater profits and a more interesting new business for someone when they buy it. 

One way to ensure your outgoings are reduced is to continue to search for lower-priced energy suppliers through Utility Bidder. Another way is to speak to suppliers and work out how to negotiate lower costs. 

Recurring Revenue 

One of the most important elements of a valuable business – that is, one that someone else will want to buy in the future – is that of recurring revenue. This is money that you receive regularly; it could come from a subscription service, or from people choosing to pay their invoices monthly through a debit scheme rather than all in one go. 

Recurring revenue is valuable because it means there is always money coming into the business. One-off, individual transactions are still important, but having recurring revenue means that it is possible to predict what the income of the business is going to be month by month, allowing a potential buyer to determine its worth more easily. 

Put Systems in Place 

You may think you have a successful, profitable business that someone will want to buy from you when you are ready to sell. However, is that the case? You might be making money, and people may want to use your business over anyone else’s, but what will happen when you are no longer running it or even working there? Will those customers still want to keep coming back? Will new customers be able to understand what the business even does? 

If your business is only there because you are, this won’t be an attractive proposition to a buyer. If this is true, you will need to ensure there are systems in place so that no matter who is working there, they will do things in the way you do them. From how the phone is answered, to how people receive their goods; it everything must have a system related to it. 

Author: Carol Trehearn

On the DISPATCH: Headlines  Local  Opinion

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