Why did you start your business? Different people will have had different reasons for it; you might want to pass something on to your children, you might want to prove that you can be a success, you might enjoy a challenge, or dislike having a boss. Or, you might want to start a business in order to grow it and then sell it – this is a popular choice, and can offer you a comfortable retirement or the funds to start all over again if this is something you enjoy. If this is the case, here are some tips on how to build a valuable business that someone will want to buy.
Ensure There is Recurring Revenue
Something that is always going to appeal to anyone looking to buy your business is if you can show that you have plenty of recurring revenue. Recurring revenue is money that comes in on a regular basis – you might have a monthly subscription service, for example, or a six monthly renewal option. You might have a credit line so you can spread your customers’ cost over time.
Although one of the transactions is clearly going to form a big part of your business, if you have a good number of recurring transactions, then you know that you will be making a certain amount each month before you even sell anything, and everything else is additional income. It makes outgoings much easier to plan and it means you can more accurately estimate your profits.
Have Systems
When you started your business, it was possibly just you. This might mean that a lot of what happens in your business is all about you – you might be the reason that people buy from your business, for example, and you might be the one who has all the knowledge from your years in your sector and your MBA from Redlands University Online. Although this is great for a small business and will enhance your profits and sales, it’s not so great when you want to sell because you won’t be selling yourself along with the business, so what is the buyer really getting?
This is why putting systems in place for every single aspect of your business is so important. Make them as in-depth as possible, listing out every element of every part of running your business. It should be simple enough for anyone to follow, and it should mean that even when you’re not there, your business runs in the same way. McDonald’s are an excellent example of a business that uses systems that work well. No matter which branch you go into, they all work the same way – you as a customer know what to expect.
Work on Your USP
Your USP – unique selling proposition or point – is what will set you apart from everyone else, so if you want to be an attractive prospect for a business buyer, your USP needs to be honed to perfection. In the end, it is this that someone will really be buying, after all.
As mentioned above, it’s best if your USP is not you. It should be something that your business does that anyone who works there or owns it can do too. It might be the products, the pricing, the customer service, the way you advertise, or anything else. Work it out, then work on it.
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