Ways To Build Value In Your Business, part I

Many people think the majority of value in their business is tied to revenue only so they tend to undervalue their worth when it comes time to sell. Most of the valuation formulas deal strictly with revenue as well. However, I've spoken to many CEO's (including yours truly) who felt they left "too much on the table" when it was time to sell their business or negotiate a deal because they didn't take many other factors into consideration.
This is also an important issue when it's time to attract investors or put together strategic alliances. The more you learn to value every aspect of your business, the more bargaining power you have when it come time to negotiate. There are dozens of ways to build value in your business and we discuss many of these in our Protégé Program. Here are a few that will help you negotiate higher fees, attract investors, bigger deals, and ultimately sell for a premium price.

1. Intellectual property (IP)
Take inventory of not only your patents, trademarks, copyrights, and trade secrets but also brand identity, websites, domain names, blogs, and social network profiles. You can create as much IP as you want and the more you do with them, the more valuable it becomes.

2. Tangible assets
What else do you own that is attached to your business? Includes real estate, inventory, collectibles, and so forth. I remember years ago a friend sold his business including the building it came with. In the final purchase contract, his broker forgot to exclude the huge billboard that sat on top of the building and produced an extra $22,000 a month in revenue. Therefore it was automatically conveyed to the new owner and my friend literally gave up that revenue because of an oversight. Ouch!

3. Contracts and other agreements
You may have agreements that could be tied to current or future revenue, produce residual revenue or allow for something of value other then direct revenue. COuld be the use of an image, name, access to a resource, etc. During the time I sold my first business, we had an existing contract to provide services to a major hotel chain. The contract was new and we hadn't yet finished the rollout to all their locations but included the potential of it in the final purchase price. If you're doing business with people right now without a writen agreement, consider putting one in place ASAP. Go to http://manifestsuccessplanning.com and download Jian's Business Contracts (rigth side of page) for over a hundred templates.

4. Customer or Subscriber list
Your list is golden and would be coveted by many! It can be a tremendous bargaining chip in a sale or partnership negotiation. The people on your list may not all be customers but have the potential to be which translates into revenue. Go to http://intentionalincome.com and click on our ecommerce listbuilding tools.

5. Systems
You're adding value anytime you've created backend infrastructure in sales, marketing, operations or production. Same thing if you've systematized any process you do in your business or have brought offline services online. Creating automation and structure in business is a big aspect of the work I do with clients and is what paves the way for a multi-million dollar business. That's why I like to use Kickstart Cart (1ShoppingCart private label) as one of the automation solutions for my business.

Reserve a spot in Maria's 16-week Business Building Protégé Program and walk step-by-step into creating your dream business http://passion2prosperity.com/program