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Why Branding and Documented Systems Add Value to a Business
"If this business were split up, I would give you the land and bricks and mortar, and I would take the brands and trade marks, and I would fare better than you." - John Stuart, Chairman of Quaker (ca. 1900)
A business valuation is not about what a company is worth in the current owner's hands, it's about the company's transferable value. It's about the probability that the business will sustain its profitability and continue to grow with a new owner at the helm. Therefore, the factors that contribute to the company's stability and consistency will be examined by prospective buyers to determine the risks associated with taking over the business.
A strong brand, an intangible asset and an element of goodwill, is a desirable attribute to have in the business-for-sale marketplace. Documented systems, also, is a factor that contributes to saleability. Both make the list of the TOP TEN VALUE DRIVERS that increase the sale price of a business.
If you are a small business owner, it would be worth your while to have a game plan for how you would package your business for sale.
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--SOLD--
Aqua Landscapes - A Testimonial
 | | Pictured are the sellers Mark & Mary Moessinger (at each end) and buyers Ken & Mary Collins (center) after closing the deal. |
After adding beautiful water features to Houston area landscapes for over 13 years, the Moessingers needed to sell Aqua Landscapes due to one of the partners having to move out of state. The company specializes in installing and maintaining commercial and residential ponds, waterfalls, and fountains.
Mary Moessinger, who managed the operation, said, "The sale of our business was handled in such a professional manner and made the experienced quite painless. I am very happy and would highly recommend CBB to anyone who wants to sell their business."
Ken and Mary Collins purchased Aqua Landscapes to add additional services to their own landscaping company. "I can't believe how smoothly the whole process went," said Ken. "Rose guided us through the whole process and provided the education we needed as first-time buyers. I will certainly be back when I'm ready to buy my next business."
Frank Stabler listed the business and Rose Stabler sold it. |
Ask the experts section
Q: Do you use rules of thumb when valuing a business?
A: Rules of thumb are simple pricing techniques that are sometimes used to arrive at a quick ballpark market value using a percentage of revenues or a multiple of a level of earnings, such as seller's discretionary earnings. However, rules of thumb is not a specific methodology we use for a business valuation, but it can be useful in testing the value conclusion arrived through the standard methods. |
