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During the past 25 years , I have had great opportunity to meet thousands of business owners. After all this time, it’s very interesting to reflect on the common characteristics of the owners of businesses that are most successful. The principles and values practiced every day by these individuals are almost exactly the same as many of the principles used in valuing a business. So what are these principles of creating business value that have created this success and added value to their operations?

Principles of Creating Business Value

Maintain a Competitive Edge

Keep an eye on your competition and make sure that you are one step ahead. This might mean implementing systems that can reduce costs and the price you have to charge customers, while still allowing you to maintain your margins. Or perhaps a new product line or offering that creates additional value for the customer. Always strive to create more value.

Ensure Your Labour Force is Stable

One of the first things a buyer asks is ‘what is the makeup of the staff and how long have they been employed with the business?’ Let’s face it, your staff is the backbone of your business. Are they being remunerated fairly? How is the work environment? Have you ever asked them if they are happy? Bottom line is that high staff turnover will reduce the value of your Business.

What is the Makeup of Your Customer Base?

If a substantial portion of your revenue depends on a small number of customers, it’s time to make some changes. A potential buyer will pay more for a business if losing a customer doesn’t mean having to make significant operational and staffing changes.

Go Golfing!

This might sound somewhat cliché, but your knowledge and relationships with customers and suppliers should be decentralized to your staff. Learn to let go. Empower your team and take yourself out of the picture as much as possible. A potential buyer wants to know that the business is not ‘you’. Surprisingly, I have seen businesses trade at almost a full year’s cash flow more with decentralized operations.

“Good management consists in showing average people how to do the work of superior people.” – John D. Rockefeller

Watch Your Profitability Trend

Not long ago I worked on a logistics company where their gross margin had dropped quite significantly due to increased fuel costs. The business was about to implement a price increase. So does this mean that customers will be lost or margins will get better? What it really means is uncertainty. Uncertainty means a decrease in value. Consistent profitability or consistent growing profitability will always add value to your business.

We are here to help.

These are just a few basic things that we discuss at Alberta Business Exchange on a daily basis. I often meet with families years before they are ready to sell so they can maximize their value at the time of the ultimate sale.

Feel free to call and discuss how you too can maximize the value of your business.

Let Us Become Your Business Sale Advisor

In a nutshell, our transaction advisory services are focused on you—your questions and concerns, and the emotions you experience throughout the process. We become another of your trusted advisors, along with your accountant and lawyer, someone who understands you, who you can lean on when you need help.

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Words are not enough to express our gratitude for Randy and Hammad at Alberta Business Exchange. From our very first meeting in late 2021 until closing day in June 2022, we knew they had our best interests at heart, every step of the way.
Wendy Docherty
I highly recommend Alberta Business Exchange when considering selling your business. We worked hard to build our business over 27 years and Randy and Hammad gave us the confidence to make the decision to use their expertise when selling our business.”
Stephen Wiebe
Alberta Business Exchange has developed a process that is easy to understand, and guides you through the necessary steps to sell your business without any added stress.
Susan Otterson
From the initial meeting till the very last moment, the ABE team was top-notch! I would recommend anyone who is looking to acquire a business, to contact the ABE team, you won’t be disappointed! They don’t deal like any other business brokerage, they make sure that the business is a perfect fit for the buyer. Thank you Randy, Hammad, and the entire ABE team for making our acquisition smooth!.
Awais Rafiq
Best in the industry! I had the pleasure of working with Randy and Hammad recently. The knowledge, attention to detail, and organization they bring to the table are unmatched and unheard of in this industry. I have bought multiple businesses in the past few years, I am impressed by the level of professionalism they offer, and my last transaction was the easiest ever I did so far. Thanks Randy and Hammad.
Kanwal Pandher