What is the value of your company?

By 27 February 2018blog

Are you thinking about selling your company to get benefits after an hard-working life? Are you looking for a buyer for your business? Are you wondering what is the value of your company?

Typically what a buyer analyze is the ability to make profits in the coming years, the gained marketing positioning and the company’s future growth potential as an autonomous entity.

Beware! If your company depends too much on your person (in terms of skills, team management, administration and relationship with clients or suppliers), its value will drop drastically.

The solution? Start from the beginning to develop the company on the basis of its future sales value.

Our suggestion is to work on your company more than in your company. It’s not easy, but it’s necessary to delegate in an organized way some activities to move from an handyman to a manager.This means having a company ready to be sold. Actually, you don’t have to sell it for real, but continuously improve it with this objective.

How to do it? Which are the key points to work on?

  • Reach a stable profit (at least for 3 years) and in line with the market standards;
  • Develop a mix of products /services and a marketing and sales strategy with demonstrable growth perspectives;
  • Mainly operate on the basis of processes, methods and systems;
  • Avoid centralizing the skills in one single person;
  • Have a motivated and economically engaged team to achieve the company’s goals;
  • Reach a critical mass in terms of people (typically above 20 employees);
  • Keep control over margins, cash flows, revenues and operating costs.

This approach could appear like a strong provocation in the mind of those who consider their company as their own creature, deeply linked to their own person, but it is the only way to maximize their value and guarantee their continuity.

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