When was the last time you took time out to consider where the value lies in your business? What is creating value and where is it being diminished? This is especially important if you are thinking about selling.
It matters little what flattering numbers might have been whispered in your ear, it is unlikely that a buyer will go for it if they can’t see how to create more value or if your business just has too many inherent risks?
Important questions to ask yourself might be:
- What does my customer base look like? Am I winning customers, if so why am I winning them? Or is my customer base no different to what it was 5 or 10 years ago? What happens if I lose my largest customer?
- What value do my products or services create for my customers? Are there better or new products on the market that can do the job? How do they compare in price? What is my profit margin per product? What is happening in my end user markets?
- How do you compare to your competitors? Where are you better than them? Or worse? What are they up to? Are there any new kids on the block?
- Where does the goodwill lie in my business? Intellectual property? Know how? Customer relationships? Is it secure?
- What would happen if I wasn’t there? Would I be missed and if so how badly?
- Where am I in the economic cycle? Is my business growing or declining relative to the sector?
Take a good look at yourself and be honest. Would you buy your business for what you think it is worth (or what someone else is telling you it is worth)?
If you need objective, independent advice on the value of your business, then get in touch and speak with our corporate finance team on 01254 679131.