Ten Shortcuts to Increase the Value of Your Business

In the dynamic landscape of business, enhancing the value of your company is a strategic imperative. From financial credibility to strategic management, there are key shortcuts that can elevate the perceived worth of your business. In this guide, we delve into ten actionable strategies that not only bolster your company’s financial standing but also position it favorably in the eyes of potential buyers. These shortcuts, when implemented wisely, can make a significant difference in maximizing the value of your business.

1. Have your financial statements audited or reviewed
   

   This can cost some money, but it gives your company creditability. A good accounting firm with a good reputation is worth its weight in gold. There are numerous alternatives to “Big 4” accounting firms. #AAFCPAs

    

2. Have your CPA firm prepare a management letter
   

   If you have your financial statements audited a management letter will come with the audit. It will identify weaknesses you have in the accounting procedures and controls. You can then tackle these and correct them or at the very least identify them in the sale process. This exhibits knowledge to the potential buyer.

    

3. Clean up the Balance Sheet

   Potential buyers want clean financial statements. The fewer adjustments that are made to the financials, the more creditability it becomes. Remove old assets no longer in service, write off bad accounts receivable, re-class loans to shareholders to equity, and absolutely remove any receivables owed from shareholders, either by repayment or compensation.

4. Manage the Income Statement

   Reduce discretionary expenses. Reduce meals & entertainment, and auto expense, adjust officer’s salary to fair market value. Every dollar you save in an expense could increase the value of the business by $4 to $5. It is much more creditable to do now instead of having to do it through a normalized adjustment when it becomes time to sell.

    

5. Develop a social media presence

   The world we live in is constant update, consistent feedback, what’s happening right now. Those of us on the older end may not like this but it is reality. Are you on Linkedin, Facebook, Twitter, Google+?  Part of the social media presence is recognizing posts by your customers. If this isn’t for you, then find someone in your organization to help out.

    

6. Review Your Most Trusted Advisors

   Sometimes companies outgrow their trusted advisors. The attorney who is jack of all law trades may no longer be a fit. The sole proprietor or small accounting may longer be able to provide the tax and business consulting services your growing business needs.

    

7. Know Who Your Competition
   

    Most businesses know who their competition is but not many document it. Write it down, list what strengths your company has over its competition, what are your weaknesses compared to your competition. Consider doing a S.W.O.T. analysis.

    

8. Prepare Budgets
   

   Keep the budget versus actual comparison and make them accessible. The ability of a business owner to budget, compare to actuals and identify the variances and reason behind those variances. This exhibits your knowledge of business and attention to the details.

    

9. Add Outside Directors
   

    See if you can find reputable, experienced business owners, consultants, attorneys, accountants, that have experience in your industry. They could help immensely with advice. In same token, start to remove family members who are not involved in daily business operations off the board of directors.

    

10. Track Analytics to Your Industry
    

    There are statistics that you can track and see how your company stacks up within your industry. This is important as you look to sell your company and justify why your company will get a higher multiple than the average in the industry. If you do not stack up to your peers, then you know the areas of financial weakness (and unrealistic expectations).

As we navigate the terrain of business value optimization, the ten shortcuts outlined above serve as invaluable tools for entrepreneurs and business owners. From fortifying financial statements to embracing the digital age through social media presence, each shortcut plays a pivotal role in shaping a company’s worth. 

By adhering to these strategies, business owners not only enhance their credibility but also position their companies as robust entities ready for strategic growth and potential acquisitions. As you embark on the journey of increasing your business value, remember that these shortcuts are not mere quick fixes but rather thoughtful, strategic approaches to fortify the foundation of your business and propel it toward greater success.