Not all businesses are built to sell, which is why I see so many with cash flow multiples in the low single digits. The single biggest factor in making your company more valuable is to think of it like an investment and know that if someone else is looking to buy it, could the business run without you or any one person holding it together?

For example, if two coffee shops have essentially the same model, sales, and profit, but one has a manager while the other is run by the owner, which one is more valuable? The managed one. That is, unless the owner of the other has built in policies and procedures to allow for anyone to run the business. Again, whether you want to sell or not, every founder / entrepreneur exits her or his business.

Here are 4 more ways to build the value of a business.

1. Novelty.

So what you sell burgers. Make your branding sexy, trendy, hip, or old fashioned. Novelty means being different, and in some cases the difference isn’t in your quoted deliverable, but how you do it. For example, hamburgers were all the rage way before McDonalds. Fast Forward 50 years and new burger places like Shake Shack have been built as novel ideas to put MCD out of business. Doing something different doesn’t always mean selling something different. Portable music was a thing well before the iPod/iPhone.

2. Growth.

The faster growth, the more value the company realizes, especially on a price multiple. Even if your company isn’t profitable, if you’re growing super fast, the market will be impressed and companies will want to buy you. In 2016, Uber lost $500 million, but was valued north of $75 billion because of its impressive growth and the novel tech for getting rides. This also means having a business model that is predictable in acquiring and keeping customers based on money spent. If it costs $100 per new customer, as long as the customer spends $101, you made money. Walmart is the largest retailer in the world and it takes in $102.59 in sales for every $100 it spends.

3. Diversity.

More than one location. More than one customer. More employee perspectives. Businesses that become more valuable increase have a greater impact in the market with the number of customers served. Technology aside, people are still the most important factor in building businesses. Remember, leadership means making decisions, not coming up with all the ideas.

4. Organization.

Clean books play a major role in selling a business, so it is wise for any business looking for an exit in the next 2 to 5 years to invest in audited financial statements. This way, when you present the business to suitors, you’ll be more trustworthy and worth more in the process.

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