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5
Ways to Increase the Value of Your Business
By Dennis Sommer (www.dennissommer.com)
Are you thinking about dramatically growing or selling
your business? Maybe you are ready to retire to Hawaii
and play golf. Maybe you want to sell your current business
and invest those profits in a new venture. There are many
reasons to sell your business, however the primary goal
of most sellers is to sell the business at the highest
price possible. Today we will examine how you can achieve
your goal.
As CEO and Senior Business Growth Specialist at Executive
Business Advisers I work with many clients who have a
goal of selling their business in the next 1 to 3 years.
In the end, the ultimate goal of most business owners
is to sell at the highest price possible. The key question
being asked is how can I increase my selling price based
on my business today. What can I do to take my $100,000
business and make it a $1 million business ? Or, my $100
million business and sell it for $1 billion.
The best way to understand your business value is to look
at your business from the perspective of a potential buyer.
By thinking like a buyer, you can see more clearly the
key characteristics that influence your selling price.
There are many characteristics a buyer will consider,
however they all lead to the top two – Sales Revenue and
Profitability.
To increase your business value or the selling price of
your business you must maximize your sales revenue and
profitability.
Here are proven strategies you can take to quickly increase
your business value.
1. Sell Proprietary Products
Unique design, functionality and technology can make your
products proprietary, which can increase the desirability
of your company and the price a buyer is willing to pay.
Proprietary products offer protection from the competition
and enables you to sell your products at a higher price
and profitability.
2. Differentiate Yourself
Similar to selling proprietary products, you can sell
more at a higher price if your customer perceives your
products and services are unique and different than others
on the market. Even if you sell products that are not
proprietary, you must show your customers what makes you
different than everyone else. When you do this successfully,
you become the best choice driving up the value of your
business.
3. Focus on Niche Markets
Selling everything to everyone in a major market can blur
your image and is very competitive. Instead, position
yourself as a market leader in a niche market. Niche specialists
focus on specific industries or type of customers. Based
on previous sales history, pick a niche market that drives
your greatest sales, profitability and quickest sales
cycle. Focus your efforts on the proven niche market and
this will drive business growth with the least amount
of effort. Niche market leaders with strong revenue and
profit growth are highly desirable businesses for buyers.
4. Repackage Your Offerings
Drive dramatic sales growth by reinventing what you offer
customers in a manner that increases sales volume and
profitability. Bigger sales revenue and profitability
comes from bigger offerings. Offer super sizes, volume
discounts, extended contracts or product bundles. Try
small “Early Buy” incentives to increase volume, but keep
them small with a time limit. Stand strong on the value
your offering provides and stick with the original price.
Do not discount pricing on your offerings if they truly
provide the value described. Provide three options or
price points. Customers are more likely not to choice
the lowest price. Use a set of three options to move customers
from the lowest to the middle price range. Make sure each
range is well defined and the differences stand out. Repacking
your offerings will increase sales revenue and reduce
your sales and marketing costs, driving up the selling
price of your business.
5. Get Rid of Underperformers
The best way to dramatically lower your costs and improve
profitability is to get rid of all your underperformers.
I mean all of them. Evaluate all of your products and
services and shelve them if they are not profitable or
help drive sales of other offerings. Stop all marketing
that is not delivering a positive return on investment.
You should also evaluate your sales team and eliminate
underperformers. This is a perfect time to build a strong
team of top performers. Buyers will pay more for a business
that has a clear focus and products that generate solid
sales revenue and profitability.
About The Author
- Dennis Sommer
Dennis Sommer is the founder and CEO of Executive Business
Advisers, a management consulting firm specializing in
business growth, sales and profit improvement.
Dennis helps CEO’s improve and optimize their company
strategy, financial health, sales and marketing to dramatically
increase sales revenue, profit margins, marketing return
on investment and business value.
Dennis is a highly sought after business growth and CEO
adviser (www.executivebusinessadvisers.com)
, keynote and seminar speaker (www.dennissommer.com)
and author of several highly popular sales, marketing
and professional development books (www.advisersecrets.com).
Contact Dennis at 800-627-6512.
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