The best time to sell a company is when you are ready to sell and not before unless unforeseen circumstances dictate otherwise. Regardless of the situation it is imperative that you are properly positioned to sell in order to increase business value.

What Can You Do To Increase Company Value?

The value of a business is not about what a company is worth in the current owner’s hands. It’s about the value that is transferred to the new ownership and the probability that the business will continue to grow and sustain profitability in the hands of the new ownership. As a result, the prospective buyer will perform exhaustive due diligence of that acquisition candidate to determine the risks associated with accepting the helm of that business.

gearsThe preparation for that business sale involves a number of key value drivers to sell a company at the highest possible value. One of those key value drivers is being a system driven company. In reality a business is a system that exists to provide value to customers, financial stakeholders and its employees.

Think of your business as a value producing enterprise. Within that enterprise exists five keydescribe the image requirements that must be managed in concert to increase business value. First, understanding the value to be delivered. Second, designing a work flow system engineered and optimized to produce the desired product and service. Third, resources to perform that work including capital, people, technology, equipment and facilities. Fourth, management of the integration of resources and work systems. Fifth, measurement systems to ensure delivery of the desired results.

The following are examples of systems that increase business value:

  • Advertising and marketing systems
  • Product or service development and improvement
  • Inventory and fixed asset control
  • Recruiting, hiring, inducting, training and performance evaluation
  • Financial reporting of business performance
  • Customer service systems
  • Safety and quality systems
  • Delivery and fulfilment systems

How Can Being a System Driven Company Increase Company Value?

Before a value creation system can be managed and improved it must be thoroughly documented, crisply articulated as to why it is important and continuously supported and monitored by key executives within the Company.

Some of the key benefits from the right business process and systems in place are:

  • Effective and timely communication to potential clients or existing ones
  • Discovering what is profitable and what isn’t
  • Producing quality products and services on time as promised
  • Completing services with predictable results and efficiency
  • Running a business that doesn’t require you

The last point is so critical because it allows the owner(s) free time to work “on” the business instead of “in” the business which will increase company value. In addition it lowers the risk that a potential acquirer sees when one or more key individuals hold the keys to the performance engine.

The process of positioning a business for sale can take a great deal of time and effort especially if no prior effort has been devoted to this task. Obviously the best time to have started positioning your business for sale was the day you went in to business. For many that may not be the case, consequently the best time to start would be today.