When you look to the future, do you consider where your growth will come from? Will you find new customers or sell more to those you already have?
The answers to both these questions can have a major impact on the value of your business.
Business Partnership studied the research from nearly 14,000 business owners who completed their Value Builder Score™ questionnaire. On average, those that had received an offer had their business valued at 3.5 times their pre-tax profit.
Delving further, we reviewed businesses with a historical growth rate of 20 per cent or greater and their multiple of profit improved to 4.3 times pre-tax profit.
The real improvement came when we took a closer look at companies offering a unique product or service. These niche companies received average offers of 5.4 times pre-tax profit – approximately 50 per cent more than average.
Growth companies often strive to build turnover by offering a wide range of products and services. However, when a strategic acquirer buys your business, they inherit something that is not easy to replicate.
Large acquirers will place less value on sales derived from products and services that you both sell – and will pay more to have access to a new product or service, which they can sell to their customers. Valuable companies find a way to deliver profit in the short term, while at the same time focusing on what drives up the value of the business.
Monopoly Control (the value of a USP) is one of eight key drivers of your Value Builder Score, a survey of more than 20,000 UK businesses measuring the finances, opportunities and risks associated with their business and the offers they have received.
Business Partnership uses the Value Builder System to help business owners increase the value of your business by up to 67 per cent. To discover your score, click here or for more information, contact our regional partners.