Business Owners:

SELL FOR MORE

13 Value-Boosters to Maximize the Value of your Business 

Practical & actionable steps to increase the value of your business, 

reduce risk, and attract better buyers.

 

#1. Maintain Clean, GAAP-Style Financials

Accurate and complete financials are the fastest way to raise your business valuation.  If you have the ability, right now, to pull a Profit and Loss for September of last year, you can skip ahead to the #2, you have this one covered.  Otherwise, you need to build a system or hire someone to keep accurate books.

• Hire a bookkeeper/CPA or at least use Quickbooks
• Clean books increase valuation multiples
• The ability to respond quickly to questions about your sales and expenses is golden during due diligence
• A business with clean books sells faster and for more money

#2. Document Add-Backs Clearly

Add-backs, owner benefits, discretionary items, one time expenses…these are pockets of hidden value.  Add-backs must be identified and explained.

• Examples of add-backs: Owner’s Salary, auto and travel expenses, benefits, donations, meals, etc. 
• Document add-backs properly
• Stick to add-back categories banks commonly accept
• Add-backs add significant value and transparency builds trust.

#3. Reduce Owner Dependence

If your business needs You to survive; it’s worth less–here is how to fix that.

• Delegate and systematize
• Prepare staff for a transition
• Benefits to the owner (more free time, higher value)
• “Buyers want a business, not a job.”

#4. Build a Strong Management Bench

“Training Your #2: The Most Underrated Value Booster.”

• Buyers look for a strong second-in-command
• The difference between delegation and leadership development
• Identify or hire a future #2
• Incentives that encourage leadership stability
• Smoother transition = higher buyer confidence.

#5. Establish Standard Operating Procedures (SOPs)

SOPs: Turning Tribal Knowledge Into Sellable Assets

• SOPs matter in due diligence
• What topics require SOPs? (ops, sales, customer service, HR, safety, etc.)
• SOPs reduce buyer risk
• Document today, profit tomorrow.

#6. Secure or Extend Key Contracts

Lock In Revenue Before Your Sale: Strong Contracts Boost Value.

• Buyers want predictable customer/vendor relationships
• Contract length can affect valuation multiples
• Ensuring assignability clauses
• Renewal and renegotiation strategies
• Result: greater stability = higher valuation.

#7. Diversify Customer Concentration

Don’t Let One Customer Sink Your Valuation: The Power of Diversification

• Buyers and banks discount high-concentration businesses
• Strategies to diversify revenue
• Expanding markets or products?
• Tracking and reporting customer mix
• Key takeaway: risk spread = value increased.

#8. Strengthen Recurring Revenue Streams

• Recurring revenue raises valuation multiples
• Types of recurring revenue by industry
• How to transition from one-time sales to recurring models
• Pricing strategies
• Measure retention and lifetime value
• Recurring revenue is the investor’s dream.

#9. Resolve Legal and Compliance Issues

Clean Up Legal Loose Ends Before Buyers Find Them

• Common legal risks in small businesses
• Loose ends slow or kill deals
• Checklist: licenses, permits, leases, contracts, IP, HR files
• How to do a “mock due diligence”
• When to involve an attorney
• Final thought: legal clarity builds buyer trust.

#10. Improve Branding and Online Presence

Your Digital First Impression Can Increase (or Decrease) Your Business Value

• Branding matters to buyers
• How website, reviews, and social media influence perceived value
• Steps to upgrade digital presence
• Reputation management strategies
• Buyers pay for businesses that look modern and relevant.

#11. Present a Believable Growth Plan

Show Buyers the Future: A Good Growth Plan Raises Value

• Growth potential matters as much as current profits
• What makes a growth plan “believable”
• Components of a 1–2 page growth roadmap
• Presenting upside without overselling
• Buyers want to see where it can go next.

#12. Optimize Working Capital and Inventory

Cleaning Up Inventory and Cash Flow Can Boost Your Valuation Overnight.

• Buyers will analyze working capital
• Strategies to improve AR/AP cycles
• Inventory control methods
• How to report clean working capital numbers to buyers
• Key takeaway: efficient businesses sell for more

#13. Invest in Systems and Technology

Systems That Sell: Use Technology to Make Your Business More Valuable.

• Buyers love technology-enabled businesses
• Examples: POS, CRM, scheduling, workflow automation, cloud accounting
• Tech reduces labor risk and errors
• Prioritizing high-ROI tech investments
• How to present your systems in due diligence
• Better systems = higher EBITDA = higher valuation