The #1 Tip for Maximising the Sale Price of Your Business

How do I increase the value of my business?

There are many articles and posts which have talked about all the things you can do to improve the value of your business and improve the likelihood of achieving a successful sale. Most of them focused on improving profitability, reducing costs, systemising your business, improving policy and procedures, updating your IT and automating your processes.  Many are focused on the sales and marketing aspects for building an automatic funnel of leads, building recurring revenue, locking existing clients into long-term contracts. Others give you plans around selecting the best business broker, advertising the business on the best websites etc. Sometimes HR and people are a key issue and so an Employee Share Ownership Plan (ESOP) is implemented.

We do many of those things in our work with clients on maximising the value of their business and they can all improve profit which is one side of the valuation equation. None of them make as much difference as the most important thing you can get right in preparing your business for sale.

The most important aspect is to identify and attract the right buyer!

This is the easiest and fastest way to drive up the multiple (the other side of the business valuation equation) and ensure you maximise the value of your business when you sell.  A strategic buyer will always pay more for your business and almost as importantly, they have probably done this before and so will be efficient and professional.

In many cases, but not always, this could be a listed company and that’s even better. They typically trade at multiples in the early teens (the long term PE average for the ASX is 13.73), some much higher depending on the industry. They are often cashed up and have access to funding for acquisitions and therefore they become great buyers.

Importantly, this aspect of preparing a business was often overlooked. It takes time and effort and a level of expertise. Some business owners (mostly those that have left succession to late) don’t have time to implement this strategy properly, but for those who do, we have seen successful sales to strategic buyers including listed companies at multiples of 6, 8.2 and even as high as 9.5!

Please get in touch to find out how to achieve a successful business exit in 21 steps or read more about business valuation on this page.

Dr Craig West

Founder & Chairman | Succession Plus

Dr Craig West is a strategic accountant who has over 20 years of experience advising business owners.

With a background as an accountant in practice and two master’s degrees, Craig formed a strong view that the majority of business owners (and often their advisers) were unprepared and unaware of the steps required to prepare for exit. He then designed and documented a unique 21-Step Business Succession and Exit Planning process to assist owners and their advisers in navigating this process.

Craig now acts as a strategic business and financial mentor for mid-market business owners. Craig has written four critically acclaimed books educating business owners on employee incentives, succession planning, asset protection, and exit strategies. Additionally, he has completed doctoral research on Employee Share Ownership Plans (ESOPs) for succession.

Craig is a Member of the Forbes Business Council where he leverages his extensive experience to contribute valuable insights on helping business leaders navigate the complexities of growing and exiting their businesses.

In April 2024, the Exit Planning Institute admitted Craig to the International Exit Planning Circle of Excellence.