How to increase company value

There are many reasons that force business owners to sell it. If the value declared by the appraiser does not suit the seller, a number of measures should be taken to increase the value of the company.

You will need

• - enterprise documentation;

• - a package of documents for creating a legal entity;

• - agreements (or preliminary arrangements) with advertising distributors, investors, partners.

Instruction manual

1

Identify the main advantages of the company: customer base, concluded agreements with partners, agreements with investors on long-term investments, etc. Decide to combine all the documentation (check the customer base, extend contracts with partners, etc.).

2

Conclude long-term contracts with advertising agencies and the media for long-term advertising. As a rule, discounts are provided for periods exceeding annual maintenance. A powerful rotation in pre-sale time will be a clear plus for the seller. The offer should reflect the fact that the company has long-term contracts with advertising distributors.

3

Pay off debts of the enterprise to regulatory authorities, banks and private creditors. The meaning of this step is that the value of an enterprise that is on the verge of bankruptcy is always lower than the value of a developing company. Thus, repayable accounts payable indicate that the company is “afloat”.

4

Invite the work team to switch to labor relations under a service agreement. Workers will probably take this statement negatively. In this case, offer them a salary increase for refusing a full-time unit. As a rule, when acquiring a company, a potential buyer prefers enterprises that have the lowest risk of associated costs. So the buyer can learn about the debts of the purchased company only after the fact of transfer of rights to the company. The conclusion of service agreements allows the buyer to be calm that the company’s employees will not commit sabotage and will not require the new owner to pay off the old debts.

5

Continue or resume work on related activities. Often, on the way to developing an enterprise, a company introduces new lines of activity or radically changes them. Thus, a company is transformed from an enterprise into a group of companies.

6

Divide the group of companies by direction and put them up for sale separately. So the total amount from the sale will be higher.