Your company is likely your greatest asset. For years you have been building it to where it is now. You feel you know its worth, that it has a stable value you can count on for retirement or future endeavors.
But are you sure and, more importantly, can you increase that value?
We all know how a business can lose value—economic downturns, stock market climate, industry-specific developments or just plain flat-out mismanagement. These are all things we consider and try to avoid.
But what about a business increasing its value? What about taking actions today that greatly magnify the worth of the company when it comes time to transition out of it? Are we doing all we can? Have we looked at what can be done?
Of course we know that the way to build a business is years of hard work, building client relationships, setting up production facilities and field distributors. This can take decades; a business isn’t necessarily built overnight.
But what if there were actions you could take right now that would increase your existing company’s value? What if you could go down a checklist and analyze each of the different aspects of your company in order to determine what will increase the value at transition time and what will inhibit it?
All Businesses Are Not Valued Equally
There is a stark reality which must be confronted: two businesses can be identical in many respects—same industry, same size, same product—and yet have widely varying values when it comes time to sell them or transition out.
There are a number of factors which make a company’s worth. These things include intangible assets, brand value and internal organizational systems. These are all things that a valuator looks at when going in to determine a company’s sales price.
By way of example, a company’s final worth can be greatly affected if it has successfully patented its proprietary processes. One company has a wealth of registered and safeguarded intangible assets. The other company simply never took the legal actions to safeguard their processes. This can mean the difference of millions of dollars of revenue.
Likewise, if a company has codified organizational systems which allow the business to run smoothly regardless of who runs it, that business will be much easier to transfer to another owner than one that hasn’t done such codifications. Things such as internal company protocols, policies and training programs, a codified organizational structure—these can all greatly influence the success rate of transferring ownership, thus greatly affecting the company’s value.
As you can see, two businesses can appear much the same to an untrained eye, but due to specific circumstances can end up with totally different values.
Take Action Now
The fantastic thing about value planning is that any owner or board can take proactive steps right now to totally change their company’s value. Whether this is done for exit planning or just as an expansion plan, increasing a company’s value is actually not difficult if you know precisely what you’re looking for.
BVC has a revolutionary method of quickly assessing a business’s current value and determining precise steps to increase it. Using computer software based on algorithms originally developed at MIT, BVC is able to rapidly input your company’s information and precisely analyze it against the factors which determine value—resulting in not only an estimate of current value but also the exact steps you can take to increase it.
Value Creation As a Strategy
Because a company is actually an asset, value creation should be part of every corporate strategy. It should be something that is woven into the day-to-day operations and planning of the company: how to take what we have and ensure that we’ve optimized the existing resources for maximum value.
BVC can help with this. It is easy. Our consultants look at thousands and thousands of companies. When we sit down to look at your business, we can give you the exact steps to incorporate into your management strategies—both marketing and sales-related as well as operational.
It’s a deep well of potential that many businesses fail to ever tap.
We can help you work out exactly what actions should be taken.
We are the business value professionals. Don’t wait until it’s time to sell to get serious about your company’s value.
The lost value can cost you a fortune.