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Increase a Company’s Valuation by Optimizing Management & Operations

This is the 5th of a 6-part series on amplifying company valuation

In our first 4 articles in this series, we reviewed ways to increase how much your company is worth if you decide to sell. In this article, we will explore another strategy to increase your company's value.

Most buyers are looking for a well-run operation that shows real profit potential. The better your company reflects this, the more your company is likely to be worth. We have all heard about “fire sales” when companies are sold for little more than the value of their assets. These situations are often when poor management and ineffective operations led to significant losses and declining revenue.

Strong Management & Operations Enable Employees to Achieve

Let’s explore how you can apply this to increase what your company is worth. The first truth in business is that great management sets the stage for great business. So the question becomes is your management team fully aligned, engaged, equipped, and working together to accomplish the things that really matter? If not, I would encourage you to find the root cause and take steps to solve it. If you don’t, it is likely that a buyer will pay less for your company and will then solve the issue themselves. However if you do, your employees are likely to thank you long before a buyer is on the scene.

The next question is do your employees and customers celebrate how well your company operates? If not, it is likely that your costs, growth, and employee retention can be improved. There are many keys to creating a well-run operation, but they begin with strong management, a clear goal, identification of any issues and their root causes, and a dedicated focus on making the process better.

At the end of the day, strong management and operations lead to more than better profits and growth. These things set the stage for what buyers could be willing to pay for your company.

In the next and final article in our 6-part series, we will review how defining future opportunities for profits and growth can also strengthen your company’s valuation. You can also find additional articles on our blog page or reach out to us to learn more.

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