2004 Fall/Winter Volume No. 4
Tips to Improve Valuation
Did you know that even management decisions that increase profit and income could be decreasing business value? The following are some questions
to ask yourself about your management decisions to see if you are maximizing your business value.
Do you own your business property or do you rent? Not only does a land purchase add to your assets, it gives a potential buyer the peace of mind of knowing that the business can not be forced to move from its current location at some later date.
Do you advertise frequently so that potential customers in the area are likely to call you first? Known as the strength of your “brand,” advertising not only brings in customers, it makes your business more attractive to potential buyers.
Do you have a good location convenient to and visible from major traffic areas? A convenient location makes your business more economical to run and provides free advertising—being visible to everyone who drives by.
Do you have a business plan with a clearly written marketing strategy so that a buyer can quickly determine if your company is a good fit? Purchasers, especially large consolidation companies are only interested in well-run companies with well-trained employees who can easily be moved into the new operation. A well-conceived business plan can show a potential buyer at a glance how your business runs.*
Do you have a fleet of quality equipment or have you always bought the cheapest units available? Those who skimp on the quality of their fleet will find they have saved money at the cost of their business valuation.
Do you charge too little for your service? No one wants to buy a business if they have to raise prices to all of the business’s customers right from the start. Chances are they will lose some customers and lose goodwill with many of them.
* See the article by Mark Duncan in Vol.2 of JohnTalk to get a buyer’s perspective. It is available online at www.polyjohn.com by clicking the JohnTalk Newsletter download on the home page.
www.polyjohn.com – Fall/Winter 2004 – JohnTalk • 5
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