Why Small Business Owners are Choosing to Value Their Own Business

Thinking Of Selling Your Business? Don’t Until You Hear This… Why Small Business Owners Are Choosing to Value Their Own Business

Selling your small business for its true value and at the very best price is definitely challenging, however surprisingly straight forward.  More small business owners are becoming aware of just how simple it is to sell their own business without having to pay the large commissions.

One of the most common reasons why small businesses which are on the market do not sell is inaccurate business valuation, resulting from an incorrect selling price that may either be too high or too low.  In determining business value, the mathematical expression of total assets minus total liabilities is only half the whole picture 

When preparing your small business for sale there are a lot of other variables that must be considered to come up with an acceptable business valuation especially to attract potential buyers.  As you are aware, no two businesses are the same, so why should they be valued the same way?  That is why it is imperative to calculate your business valuation and include absolutely everything - just the 'multiple' method may not cut it.

Preparing your business for sale - Adding value to your business to attract business buyers

As a business owner there are some simple ways to improve your business while preparing your business for sale now or in the future.

In order to add value to your business there are a number of things you need to have very clear in your mind.

Initially, think about the vision that you have for your business and where you see it in the timeframe you estimate selling your business. Go over all the things you really want from your business and seek out ways to improve your business in order to get there.

Then take a step back and make sure your business does not depict you (the owner) as just having a job. You will need to structure your business to show it will run without you. This will attract business buyers and help add value to your business.

“You read a book from beginning to end. You run a business the opposite way. You start with the end, and then you do everything you must to reach it.” Harold S. Geneen

During the process of preparing your business for sale it is important to demonstrate a well-organized and effective operation that can function at arms length – this too will add value to your business and attract business buyers.

There are some things you must put into action first, such as:

- Ensure your business has a clear structure. Separate your activity into sections and areas. For instance, you have to establish what needs to be done and then what should be systemized

- There may be clients /customers you need to meet and networking events to attend to help your business grow

Preparing your business for sale – your business image and your employees

When it comes to having a team or staff, it is vital for everyone to know exactly what they have to do. Each person has to clearly understand his or her role and responsibilities. Your employees represent your business image and play a critical role in attracting business buyers.

You will also need to create a safe and friendly business environment by motivating and supporting staff to be efficient and do their jobs right.

Building and adding value to your business

When it comes to attending to your customers/clients needs, you should be very diligent and make sure their requirements are met 100%. This can be a very time consuming activity, however a ‘must do’ and why this also needs to have set out procedures in place.

Organize your scheduled meetings, settle on the points for discussion beforehand, establish the goals and the strategies to employ in order to reach your goal and keep you on purpose. This will help you save a lot of valuable time as well as help keep everyone on the right track.

As a small business owner you cannot afford to fall into the busy being busy trap – plan your day to guarantee this doesn’t happen.

To ensure you are providing your clients with maximum value added services and faster solutions for their issues, it is extremely important to establish regular communications such as email, newsletters, calls, networking and educational activities.

All these things are of great importance in order for you to structure your business and attract business buyers.

But remember, when preparing your business for sale, the essential thing to do is understand that you cannot do it all by yourself.  Becoming a workaholic is not a solution.  Learn to delegate the minor responsibilities and keep yourself focused on doing the most productive tasks for your business.

By working primarily on the activities that really require your effort and your expertise as the business owner, you will be adding value to your business as well as consistently maintaining maximum value, enabling your business the power to attract business buyers at any time.