Many people think the value in their business is primarily tied to revenue only so they tend to undervalue their worth when it comes time to sell. 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 literally dozens of ways to build value in your business---we discuss many of these in our Protégé Program. Here is part II of my list...
6. The people on your team
Relationships are important and can be used as a bargaining chip in many negotiations. Includes your advisors, producers, creatives, sales stars, as well as who’s in your “golden rolodex”.
7. Goodwill ~ “Blue Sky”
What is your name worth to you? Have you been involved in community outreach? Featured in the media? Your reputation, good name and the credibility of your business can increase your value.
8. Access to capital and other resources
Do you have access to resources you may not have fully utilized yet but could be considered a valuable asset to someone that wants to do business with you.
9. Aged corporation
Age before beauty applies here! The longer your company has been in existence, the easier it is to establish business lines of credit…and take advantage of other perks. Often times, a younger company may buy an existing shell of a company for this very reason.
10. Ability to create new Intellectual Property
If you have patents, trademarks or other intellectual property that hasn’t been fully expressed or developed, the potential of its development may be worth more than you know. Case in point if you own a PC, how many versions of Windows have you purchased since you’ve had your first computer?
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