Mergers & Acquisitions Advisory

A Neumann & Associates, LLC

March 16, 2016

How to increase a business valuation

By Achim Neumann

When a business owner moves to sell their company, they should be shooting for the highest value possible. There are a myriad of things that can be implemented before the listing of a business that can increase a business valuation. This article will discuss several ways to increase the perceived value of a business in the eyes of potential buyers.

1) Ensure key employees stay on board

The performance of a business can be compromised if linchpin workers leave the company shortly before its sale. Without them, work flow can suffer, and valuable resources will have to be spent to bring new talent into the company.

Assure staff that the new buyers will maintain the culture that currently exists, and they will be less likely to seek a new gig. Long term incentives such as profit sharing will keep employees working hard for the company during the transition to the new management team.

2) Create clean, concise business processes

The best asset in any business sale is the person who built it. While the seller can’t stick around to run the company, well organized infrastructure and business processes will make these tasks easier.

This can be done by setting up project management software, as it will make work flow and the chain of command within the business simple for outside investors to understand. When writing a manual that describes the company’s positions, tasks, and responsibilities, use plain language so that all aspects of the operation can be understood with minimal difficulty.

3) Pay mind to appearances

The curb appeal of a company is as much of a factor in its business valuation as it is with a well-kept home on the real estate market. Time should be taken to clean the premises, complete cosmetic renovations, and add decorating touches that will impress potential buyers.

Ensure that these measures are completed before listing a business, as ongoing work when suitors walk in the door will leave a negative impression.

4) Improve profit margins

Finally, the top consideration of any business buyer when purchasing a company is its ability to generate profits easily. The best way to boost the valuation of a business is to improve its margins in the quarters prior to its sale.

By increasing this measure, it can be demonstrated that the business in question has upside potential, which can elevate its perceived value substantially.

There you have it, just a few ways on how to increase a business valuation. Check back frequently to the blog for more strategies and additional information.

About A Neumann & Associates, LLC

A Neumann & Associates, LLC is a professional mergers & acquisitions and business brokerage firm having assisted business owners and buyers in the business valuation and business transfer process through its affiliations for the past 30 years. With an A+ Better Business Bureau rating, the company has senior trusted professionals with a deep knowledge based in multiple field offices along the East Coast and has performed hundreds of business valuations in its history. The firm’s competitive transaction fees are based on successfully completing transactions. For more information, please contact A Neumann & Associates at 732-872-6777 or

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Eric H., Investor

“I recently contacted A. Neumann and Associates about getting a valuation of my business done. I spoke with Marc, who explained the process in detail. After meeting with Marc in order to get a clear understanding of my business, and what I was hoping to accomplish. His patience in answering all my questions and his knowledge of the proper way to market my business gave me great confidence that this is the firm I will be using to sell my business for max value. Working with Marc at A Neumann & Associates was very easy and professional. I did not know all that was going to be involved in selling my business but they helped me through the process. What I thought was going to be a just another one of those pushy sales companies was just the opposite. Polite, knowledgeable, and a pleasure to talk to and deal with. I highly recommend this firm to anybody who wants to sell now or down the road. Marc not only knows his stuff, but actually is a real nice guy.”

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Colby Harris, Co-Owner, Del Mar Designs

“Claus Madsen thoroughly helped us with selling our company. From the 1st introductory meeting explaining to us what was possible, to providing us with resources to assist with the sale. Claus was invaluable throughout the whole sales process. Claus was with us every step of the journey and always made himself available for any questions or issues that came up along the way. If you are interested in selling your business, I encourage you to reach out to Claus and the ANA team so that they can let you know what’s achievable. These guys will make it happen!”

Ron Harris, Co-Owner and Vice President, Del Mar Designs

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