We all know that it’s important to keep our minds and our bodies healthy, a fact that has become even more relevant over the last year. But our health, and particularly our mental health, can be disguised by the right wardrobe or the right attitude. In the same way, the underlying health of your business can be disguised by a well polished website and some good financials.
Traditional valuation methods would have you believe that the value and therefore saleability of your business is exclusively dictated by the financials. But what differentiates you from other businesses and what really adds value is that which is below the surface.
So, assuming you know that things below the surface of your business aren’t quite as healthy as the external appearance suggests, what can you do about it? Well, the most important thing to say is don’t despair… recognising that things aren’t quite right is the first step to making them better.
The second thing to suggest is to get some advice from an experienced and trustworthy source. Knowing that something isn’t right and identifying exactly what it is and how to fix it are very different things. I know that if I am overweight, I need to adjust my diet and exercise, but if I speak to a fitness coach and a dietician, I know they will suggest things I would otherwise not have thought of.
Thirdly, give yourself time. Change takes time but, particularly if you are thinking of selling your business, time may feel like a luxury you don’t have. But in most cases the time taken now to get it right will be more than worthwhile later down the line. Part of the service offered by Entrepreneurs Hub is working with business owners to help them prepare their business for sale, and then take them to market. The preparation phase can easily last for several months, but the investment into the business over time can have a dramatic impact on value and also on exit terms.
But what if you don’t know there is anything wrong under the surface? If everything seems to be running well and there are no outward signs, it is either because everything really is fine or there might be something there you just aren’t aware of.
You need to take a step back and look at your business with detached and dispassionate eyes… not very easy for most business owners I know. You may be fortunate enough to have a close and trusted friend who is in business and you can ask to help. You should ask them, or yourself, the question – if I were looking at buying this business, knowing what I know, is there anything that would worry me?
Of course, you can always ask an independent, experienced adviser like Entrepreneurs Hub to give your business a full health-check and report back. If you would like to talk to us in strict confidence and with no obligation, please do drop us a line.