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When you sell your company, your goal is easy: Get the highest price. But how do you know that your business is really worth what you are asking?
Buyers just don’t see revenue – they assess your business’s health and the overall capacity of the future. Here are the five major value drivers who make your company more attractive and justify the higher sales price.
1. Profit
Profit is the most direct driver of the price. Your margins – especially the overall margin and Abbotta (interest, tax, departmental, and discrimination before the income) – should meet or exceed the average of your industry.
There may be a need to increase prices or reduce costs, but be realistic. For example, we worked with a coffee maker whose profit margin was only 8 %, while the industry’s average was 18 %. Instead of intending to jump a full 10-point jump, we set a 12 % more interim purpose-and reached it.
Why does this increase: 50 % improvement in profit is forced for buyers and shows operational upside down.
Related: 2 large drivers of company price
2. The freedom of leadership
A strong leadership team increases tremendous value – especially if the business can operate without owner or other important executives.
Buyers want to get the system and the people. If the founder is still making most of the decisions, the time has come to withdraw and empower others.
Why its price goes up: A business that runs easily without its founder reduces the risk for the buyer and increases the transfer confidence.
3. Repeated revenue
An expected income series – through subscriptions, memberships or contracts – can significantly increase the diagnosis.
We take the example of a working dog business. He turned his $ 19 self wash service into a $ 33 monthly membership. In the first month alone, they closed repeated revenue at $ 5,000.
Why this price goes up: Prediction revenue relies on buyers in future cash flow and makes it easier.
4. Progressive price (sales on sale)
Provide more ways to do business with users. One -time buyers can be converted into long -term revenue sources in Ed on Services, such as recovery contracts, upscells, or warranties.
A concrete coating company with whom we worked began offering annual sailist services after the initial installation, which created a repeated touch point that increased the customer Lifetime Value.
Why this price goes up: Buyers see a built -in opportunity to increase revenue from your current customer base.
5. Low cost increases opportunities
Buyers want the potential for growth – but without investing on a large scale. Show them how the business can scale effectively.
For example, a restaurant used to spend only five nights a week. The new owner added breakfast, lunch and weekends. The development was quick, and the cost was minimal.
Why does this value grow: Easy to implement implementation strategies make the business more attractive and expanded.
Where to start from where
Start with an area that needs the most attention. In a coffee maker, we focus on improving the margin before leading and repeated revenue.
Remember: rising price takes time. Looking at the real effect in profit, you will need at least 12 months, and if you want to command the premium price, the preparation of three to five years is ideal.
Focus on what is not
Some things – such as patents, trademarks or AI integration – may seem impressive but often do not increase diagnosis until they generate direct income. Protect your brand and consider the tech upgrade, but only if they support a strong lower line.
Related: Are ready to sell your business? Increase your company’s Enterprise Value to make maximum profit
The final views
The time you can invest is the time – start now. As you start to improve the drivers of key value, when it comes to selling you, you will have the power to negotiate.
Pay attention to what matter. Create a business for self-retain, profitable and development-and buyers will be in line.
When you sell your company, your goal is easy: Get the highest price. But how do you know that your business is really worth what you are asking?
Buyers just don’t see revenue – they assess your business’s health and the overall capacity of the future. Here are the five major value drivers who make your company more attractive and justify the higher sales price.
1. Profit
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