Ascend Business partners have developed a systematic approach, called the “Seven Steps to REFIRE”, to work with business owners to increase the value of their business and improve their profits. This allows them to exit their business with a valuable asset they can sell, transition to the next generation, or provide them with an ongoing passive income.
In this blog we share the third of the seven steps – Value Enhancement
You may find it interesting that around two-thirds of business owners do not know the value of their business. It’s fascinating that many business owners will know the value of their home, but not the value of their business, which may well be their most valuable asset. And then if you don’t know what your business is worth its going to be hard to know how to increase its value! So the first step in creating a value enhancement program for your business is to get a valuation done. It may take a little amount of time and money to get this done the first time, although once it is done you should be able to do this yourself at least annually. If you’re serious about building value in your business then you should be monitoring how your value increases year on year.
Do you know how to increase the value of your business and build your wealth? There are a number of drivers available for you to maximise the value of your business. Identifying and implementing these drivers will give your business the best chance to stand out from the crowd and be sold for a premium. The reduction of risks faced in the business is one of the best ways to create an immediate increase in value, as new owners will be prepared to invest at a premium in return for reliable ongoing business income. You can mimimise risk by ensuring you have good financial records and reporting, an appropriate business structure, protection of assets and ensuring you have the most appropriate insurance covers in place. The premium value drivers to maximise business value include: reducing owner (and key staff) dependency, creating a sustainable competitive advantage, putting in place strong governance systems and positioning your business for strategic acquisition.
Why leave your future to chance?
If you are serious about building your wealth then get started now by contacting us to provide you with an evaluation of your business. The evaluation will give you a good indication of the market worth of your business and identify the specific actions you need to take to sell or transition your business. Even if you’re not planning to sell, now or in the future, being prepared to transition your ownership is one of the most important things you can do as a business owner.
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