Consumer demand tends to be unpredictable, so putting all of your eggs in one basket can be risky. Diversifying can be a good way to safeguard your business–and increase profits while you’re at it. Remember Blockbuster Video, or any of these other businesses that quickly became obsolete? Even if you feel secure with the way things are going now, they could take a turn later. Plus, when it comes time to sell your business, having a diverse portfolio can help your buyer feel comfortable taking over. However, just like with…
You may think you know what your business is worth. You can just feel it in your gut! We don’t mean to doubt your intuition, but we’re sorry to say that this type of thinking won’t get you far. However, you’re on the right track: knowing the value of your business is very important. But estimating your business value is a task best left to a professional. Getting a formal business valuation gives you valuable insight into your business’s worth. You’ll gain access to multiple facts and figures relating to…
As a business owner, one of the most important documents to understand is the balance sheet. This sheet helps show buyers the big picture of what they’re going to acquire, and it’s one of the important business sheets we highlight in our past post about making sure your business looks good on paper. Looking at the balance sheet, your buyer will be able to tell which assets are short-term, and which they can expect to be productive in the future. It helps them evaluate the amount and types of assets…
Qualified buyers are going to put a lot of thought into how much revenue they can safely anticipate once they take over. It’s important to show a history of healthy cash flow that extends into the future. Repeat transactions show that your services deliver, and that your buyer will be inheriting a solid base of loyal clients. If you have written contracts with those clients, you’re proving a future of business success. 4 Ways to Demonstrate Healthy Cash Flow (From the Past and Into the Future) Keep a record of…
Many business owners are hesitant to increase their rates, but sometimes, that’s the right thing to do. Products become more expensive, and as you gain experience, the quality of your service increases. Don’t sell yourself short! Increasing your rates does come with some inherent risk. However, if you use the right strategy, you can help it to go over smoothly. 10 Ways to Raise Rates without Annoying Your Customers Add a Fee or Raise an Existing Fee: Instead of increasing the price of your actual service, consider adding or raising…
If you’re a business owner, you know that a certain amount of risk and uncertainty comes with the territory. Most of the time, that’s a good thing. It can keep you curious and motivated. Plus, it’s true that with uncertainty comes opportunity. However, there needs to be a balance. Ruminating in uncertainty can cause a level of stress that hinders growth. When you are running or selling a business, it’s important to develop a balanced relationship with uncertainty. Six Methods for Business Owners to Improve Their Relationship with Uncertainty Gather…
As most business owners are aware, competitors are a major force to contend with. No matter what type of company you run, competitors will be trying to take away your customer base. That’s why it’s important that your business offers something special that sets you apart from your competitors. This is especially important when you’re trying to sell your business, since buyers don’t want to take over a company that blends in with the rest. To increase your chances of selling your company for a nice profit, it’s a good…
In true entrepreneurial spirit, many business owners design their business with the intention of one day selling it. Others don’t give the sales process much thought until later on. However, even if your company is successful now, you may want to take your career in a different direction down the road or retire one day. It’s a great feeling to see your hard work pay off with your business selling at a good price, but it takes strategy to achieve that goal. One of the best ways to frame your…
A company operations manual can be very helpful in selling a business! No matter the size of your business, creating an operations manual is likely to benefit you. This living document contains important contact lists, checklists about functions of the business, how-to guides, and policies, making it a helpful tool for those unfamiliar with operations. Each business’s operations manual will be a little different. Some will need a 1000-page manual that is loaded with detail, while others will find that a binder or online document with just a few checklists…
When preparing to sell your business, you should be prepared to have your financials heavily scrutinized. A qualified buyer will be nothing if not thorough, so make sure your business looks good on paper. But keep in mind, papers that look good aren’t worth much if they don’t match up with reality. From a buyer’s perspective, a business is worth buying if it shows good profitability, margins, costs, and expenses, all of which need to be clearly visible from your financials. The documents act as a sort of road map…
