Moving on – How to Make your Business a Worthwhile Purchase

If you are a business owner worth your salt (or silicon), you’ll be planning big things for your small business in the future. Either you’re going to want to grow your business to the tune that someone from Google/IBM/Comet want to offer you a cool few mil to acquire you, or else you want to make sure your precious life work yields more cash than just to keep you in a good line in designer tees and holidays in far flung places.

In other words, you need to think big, and you need to think ahead. What is it about your business that makes it valuable? Where is the income from your business coming from for the next few years, and what is its potential? Your business, once you’ve been operating, should be more than just YOU – after all, once you have a brand, a loyal following and some measurable income, you become a business not just an individual with a winning way with a screwdriver.

What is it about your business that makes it valuable?
Your brand, your built up customers and your goodwill, although dificcult to measure, are one of the key selling points for any business, as this shows its potential. A restaurant that takes thousands of dollars/pounds a month, and then poisons all of its diners in one sitting, is no longer a viable business. It’s the same thing with any small business.

Brand: Make sure that customers, suppliers and contacts know your brand – your logo, your company motto or slogan and the way you conduct yourself and your business transaction are all key in making sure that your brand is associated with you, which will add value to your business. My own brand is ‘We can help you love learning’ and it has to come through in my writing, in the conduct I have with my contacts (consequently I volunteer for learning events, am stocked in the library, offer lots of stuff for free, and am currently back teaching!) And I mean it – it’s not a hollow statement, it’s a fact of my business conduct.

Regular activities: What do you need to do, and when, for your business to keep going in the way that it is, but in an upward direction. Are there regular tasks you have to do, on a particular day/month/time of the year, that make your business function well? If so, this is part of your business activity ‘model’ and should be recorded in an operating manual. Operating manuals, although you may feel in the beginning a large and unwieldy activity, can support your business case for selling, and give weight to claims that you know what you are doing. As well as that, if anything was to happen which meant that you can’t operate your business yourself, another could step into your place, and run the business for you for a while. That couldn’t happen if there were no ‘instructions’ on how to run the business, which, essentially, is what a business operating manual is.

Regular customers: Especially if any have contracted you on any sort of retainer or monthly subscription basis. However, a regular customer file, along with their average annual spend, can show how much your business is worth in potential sales.

Well kept accounts: If you keep your books on a monthly basis, and finalise at the end of the financial year, you can’t go far wrong. Accounts should detail your outgoings, capital purchases, other expenses, income, profit, loss, depreciation of any equipment etc. These accounts make up what you’re really worth, at a given point in time, on paper. Any stock or cash you have will be shown here.

Detailed business plans – to show that you have a direction, and if possible, show where you have built the business from.

Other areas to consider

Look after your stock and equipment – after all, if you don’t it will lose value.

Look after any property you have – if you sell a business as a going concern, appearances are everything. A smoky shop or workshop does not give a good impression, nor does a pile of spare parts littered on every surface.

Maintain a good reputation and a good credit score -pay your bills on time, deliver what you say you are going to, and conduct your business with professionalism,

Find out as much as you can from others who have done the same – what made Google want to buy YouTube?? Potential – and that’s where you can compete with the bigger businesses!