Value Is Relative
Value-added seems to be the hit buzzword of the last decade. Value is indicative of how much more desirable an item is because of specific attributes, making it worth more in a person’s opinion. When people use their dollars to buy things, it means that they value those items more than they value the money they have. Since investors and other people obviously have different things that they value, considering what most investors consider important will help you when you are creating value to sell in a business.
What Do Potential Buyers Value?
Investors value different things, depending on their previous buying experience and how much capital they have to work with. Those with less capital but a lot of business experience might be willing to buy a business that has previous financial difficulty but also clearly has a lot of potential. Most investors, however, are looking for something that will bring steady income without potential problems. This means that creating value in your business can be as simple as showing potential buyers a few years’ worth of your profit statements.
When buying a property, a new owner may see value in convenience, such as having contracts for purchasing and selling already in place. This is a good way for them to avoid an initial hiccup in production as they transfer into ownership. Arranging to have employee contracts stay with the company can also be a way for convenience to add value. Unfortunately, this can also work against you if the new owner wants to hire his or her own employees.
Flexibility
One of the easiest ways to ensure that a buyer has the option to keep employees if it is desired is to discuss it beforehand. This can be addressed in the buying contract, as well as existing contracting with purchasers and suppliers. However, it will not be common knowledge unless you specify that these items are negotiable. Flexibility can be the key to selling your business quickly instead of it languishing on the market for months, if not years. Many buyers will find value in having more than one option when it comes to hiring labor and arranging purchasing and marketing agreements.
Finding the right buyer can ensure that he or she gets a good value and that you get the price you need. It is important to know what type of buyers your sector typically attracts and what is customary in terms of sale conditions. Value is extremely subjective and will depend upon what the buyer desires.
