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A Business Valuation Analysis Can Help Increase the Value of Your Business

Posted in Business Valuation, on Apr 2016, By: Mark S. Gottlieb

It is often assumed that a business valuation is only necessary in instances of conflict or litigation, but business valuations can be very useful in identifying ways to increase the value of an existing business.

When business owners get valuations, they are often surprised by the lower-than-anticipated results as it is easy to overvalue personal assets and lose sight of the fact that market value is based almost exclusively on objective data regarding future profitability.

It is essential that business owners have an accurate knowledge of their businesses value in order to be in a position to increase its worth. A business valuation expert would be able to provide an exact valuation and help the business owner develop a long term plan to increase the business’s market value.  The specifics of this plan would be dependent on the company’s position in the marketplace as well as its financial growth history. There are a few basic techniques that typically work to increase a business’s value. You may want to consider one or more of the following:

  • Increase Profitability.

    • Look at the future prospects in the market and work to ensure that profits will continue increasing,
    • Find efficiencies that cut cost,
    • Grow intangible assets,
    • Establish sales and/or marketing departments,
    • Increase employee retention, and/or
    • Diversify revenue by producing a larger variety of products or services.
  • Simplify.

    • Establish seamless procedures and routines,
    • Create recurring revenue statements, and/or
    • Reduce or eliminate shareholders loans.
  • Organize.

    • Tidy up the business’s physical location, and/or
    • Neatly catalog important documents.

A business valuation expert would be able to work out a detailed plan to implement these techniques into a valuable business model.

If you or your client is interested in increasing a company’s value, feel free to contact our office at msgcpa@msgcpa.com or (646) 661-3800.