Maximizing your Business Value

 

How Align Values a Business

​

Valuing a business is both a science and an art. While we use proven methods and formulas, experience and market insight also play a big role.

​

As Mergers and Acquisitions advisors, we have access to real-world business sales data to help guide the process. We also draw from years of experience working with similar companies to making informed assumptions and choosing the right risk and return factors.

In the end, the true value of a business comes down to three key things:

​

• What the business owns

• How much it earns

• How much risk is involved compared to the expected return

​

By combining data, experience, and strategy, we work to find the most accurate value for your business.

​

What Determines a Business’s Value?

 

What the Business Owns

A business’s assets can be both tangible and intangible.
Tangible assets include things like furniture, equipment, inventory, and real estate.
Intangible assets might be the company’s name, client contracts, lease agreements, trade secrets, licenses, recipes, or patents. These are often just as important, sometimes even more.

​

What the Business Earns

​

A business generates financial value for its owner. This usually includes profits and the owner’s salary. In some cases, the owner may also benefit from things like health insurance, a company vehicle, or a retirement plan—all which factor into the business's overall value.

 

Risk vs. Return

​

Like any investment, buying a business comes with risk. The value depends on how likely the business is to keep earning money in the future and how easily those earnings can be maintained or repeated. The more reliable and consistent the income, the higher the value.

 

A Note on “Rules of Thumb”

 

You may hear about simple formulas or “rules of thumb” for valuing businesses. While these might give a general idea, they’re often inaccurate—because they’re based on the idea of an “average business.” No two businesses are the same.

 

An experienced M&A Advisor looks beyond general rules. By focusing on the unique aspects of your business and using real-world data and insight, we deliver a more accurate and meaningful valuation.

 

How to Maximize Your Business Value

 

If you're thinking about selling your business—now or in the future—preparation is key.

 

Here are the most important steps to take to get the best value

​

Keep Clean Financial Records

Report all income and expenses. Hidden income or off-the-books activity can drastically lower your valuation.

​

Boost Profits and Sales

Aim for year-over-year growth and cut unnecessary costs. Declining revenue is a red flag for buyers.

​​

Sell at Your Peak, Not When You're Burnt Out

Your passion and energy still matter. Avoid waiting until you’re too tired or disengaged buyers can see that in the numbers.

​​

Have a Strong Lease or Property Plan

Make sure your lease has 5–10 years left. If you own the property, get it appraised to understand its value.

​

Clear Legal and Financial Issues

Avoid lawsuits, liens, or other encumbrances that may scare off buyers.

​

Use Professional Help

Contracts, leases, and financials should all be reviewed or prepared by professionals—especially accountants and attorneys.

 

Build a Dependable Team

Your business should be able to run without you. Loyal, capable employees make your business more attractive to buyers.

 

Organize Inventory and Pay Down Debt

Remove outdated stock and settle outstanding obligations to present a cleaner balance sheet.

 

Maintain a Clean and Professional Space

First impressions count. A tidy, well-kept facility adds to your business's perceived value.

 

Diversify Customers and Products

Avoid relying too heavily on one client or product. A broad base reduces risk and increases appeal.

 

Systematize Operations

Document your processes. Buyers want to know if the business can run smoothly without you.

 

Secure Contracts Where Possible

Customer and supplier agreements show stability and future income potential.

 

Plan for the Sale

When it’s time to sell, surround yourself with the right team—an attorney, accountant, and....

...M&A Advisor—to help you get the best deal!!

 

You only get one shot to sell your business. Preparation makes all the difference!