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How to add value to your business?
by Nuha Awad, B. Bus, (Accounting) - #64

When selling a business the first consideration in relation to valuing the business is given to the tangible assets such as plant and equipment, buildings, stock and financial performance. The intangible assets are also worth considering as they can increase the market value of the business. Intangible assets mean assets that are
not of a physical nature.

Working on the intangible assets can ensure you receive the maximum consideration when you decide to sell your business.

Here are some examples of the intangible assets of the business:

1. Culture and value to meet challenges: Be sure that your business has the culture and values tomeet its present challenges and has defined goals to capitalise on future opportunities. This gives the prospective buyer confidence in the business.

2. Acquire and retain knowledge: Your business needs to acquire knowledge resources to remain competitive and for future growth.

3. Develop skills and competencies: Provide your employees with the opportunities to increase their skill and competency levels to meet the current and future needs of the business. A company with a definite program and history of developing skills and competencies is one that gives a buyer a greater level of confidence.

4. Lead and communicate: Establishing clear goals and aims for your business, remain actively involved in change processes while delegating and motivating employees to achieve goals. Clearly communicate this throughout the business.

5. Processes and systems: To remain competitive the business needs to have good processes and systems that support all its activities. The right processes and systems contribute to overall efficiency and enhance the value of the business.

6. Build relationships: Build on existing relationships, especially with existing customers. This can be strongly reflected in the value of a business as continuing repeat business from past customers not only shows up in sales turnover but your cost of sales reduces.

7. Reputation and trust: These play a key role in how competitive a business is and need constant attention so that the business is viewed favourably.

St. Clair partners
Phone (02) 9221 4088

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