Most business owners wonder what their business will sell for when they come to exit, but many have no measurable method on which to base their assessment.
Indeed, in my experience business owners want a certain amount of dollars for their business, but cannot explain any methodology which gets them there, or even close.
If they turn to you for advice on what their business is really worth, how well positioned are you to:
- Provide an accurate answer in a reasonable timeframe;
- Back up your business value indication possibly using state of the art software tools;
- Create a disturbance in your client’s mind that will lead them to act – and engage you to help them achieve their goal;
- Make great profit margins providing these services and;
- Provide your client with precisely what they needed at value-for-money fees.
I’d guess not all firms are not well positioned to do this.
As a result, you could be missing out on numerous opportunities to provide valuable services to your clients and make a lot more money doing it!
So how do we address this……
OFFER A BUSINESS VALUE INDICATION SERVICE TO YOUR CLIENTS.
Work with your clients to help them build a better business that will be worth more when they come to exit.
Start off by working out a reasonable estimate of the value of the business today and match that up against what the client thinks or wants the business to be worth in the future when they exit.
Establish the $$ gap between the clients’ want and the reasonable estimate and then map out a plan to help them fill the gap.
It could be through improved profitability or stronger cashflow. Also working on strategies to reduce risk like better management of receivables or quicker movement of inventory. There are numerous ways you can help here.
Don’t forget to develop accountability systems through quarterly Board of Advice meetings and annual business value indication reviews to measure the $$ reduction in the gap.
Finally, consider value pricing models or packaged solutions billed monthly based on the anticipated reasonable value you believe you will create with the client.
It’s time to get moving towards building the businesses your clients want, and at the same time, building a more profitable practice for yourself!
Business valuation indication services is one of the services I discuss with accounting firms in my Practice Management Enabled Program. If you would like to find out more contact me to book a complimentary 45-minute Practice Management assessment to find out what your firm needs to implement for success.