Hanneke Antonelli Coaching

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Four Ways To Increase The Value Of Your Business

Hanneke Antonelli

In last week’s blog post, “Why value is more important than profit,” we discussed why value is more important than profit.

We did a quick overview of the multiplier range that a business will be assigned depending on the size, industry, and certain company aspects.

Today we’re going to look at what those factors are that brokers and industry experts look at when it comes to assigning multipliers.

So as I mentioned last week:

You can’t control the multiplier range that is assigned to your business. But you can control where you fall within that range by concentrating on what the Exit Planning Industry refers to as the four C’s.

And those four C’s are:

Human Capital:

Investing in skilled employees who know the ins and outs of your business and are given autonomy over certain projects is key to improving the value of your business.

Having key players in place that can run your business without you means that your business is more likely to succeed if you were to sell it to someone else. Which makes a business more desirable from an investment and buyer’s point of view.

Customer Capital:

Buyers and investors specifically look at the concentration of your customer base: i.e., does most of your revenue come from two or three customers, or do you have a wide customer base?

Next, who’s running those relationships? If the relationships are mostly held/handled by the business owner, that increases the risk of a successful business transition.

And finally, what kind of customer contracts are in place with your clients and customers?

Structural Capital:

This refers to the infrastructure of the business. What processes and systems have been developed? Has everything been documented into clearly defined SOPs for all areas of your business?

Social Capital:

This refers to your business brand and the perception of your business to the outside world, as well as the culture of your company. It involves everything from the daily operations of your business, and how your team works together, to the way you communicate with your clients.

Think Apple, Google, and Gucci - these are all strong brands. When you hear the name of the company it immediately condors up certain thoughts and perceptions.

The great news is that you’re probably already working on improving all of the above in your business because doing so is considered a good business strategy.

And now you have more motivation to keep improving all of the above areas as it will not only lead to higher profits and higher value but investing in the above factors will also give you more freedom.

How can we work together?

If you liked what you read here, and you’re curious to learn more about business coaching, you might also like this other article I wrote: How can a business coach help me?

And here are a few more ways you can get more support from me to become the best entrepreneur you can be: