Why a better business valuation improves your profit

Here’s how it works – in really simple terms.

When you’re building your business you have many available leverage points. Let’s work with just one of them: Systems

Creating better systems, policies and procedures improves your asset value. In simple terms an investor looking at your business will see that (s)he can more rapidly get a return on the capital invested when there are good systems in place. And they’d therefore be willing to pay more for your business, should you be willing to sell it.

Banners GetMedia 3

Funnily enough the bank sees it the same way. Yes your profit and loss statement is important, but it’s not everything. What if you spent six months using all your excess profit investing in building better systems for the business. Now it’s ready to take on the world and double revenue in a short period of time. Don’t you reckon the bank would be more willing to lend you expansion capital?

But it also works directly for you: After spending all that effort building systems, when you hire a new sales and marketing person they can immediately get to work, and start building new sales quicker and with greater ease, compared to if you did not have those systems in place.

Not quite sure where to start? To get you started on improving your leverage, download the free ebook here:
The_4_Pillars_00-200px

About Mike Boorn Plener

Mike Boorn Plener
Mike Boorn Plener is a Business Growth Specialist and Founder of Business Connector. Mike has the ability to swiftly analyse a problem and be the catalyst to generate practical solutions. Click to view Mike Boorn Plener's full profile

Check Also

Understanding Venture Capital

Venture Capital is one of the most important aspects of the entrepreneurship process, but often ...

  • Husher Clarke

    Use the present to future value formula. Combine average annual sales
    profits along with average annual growth percentage and future period of
    growth.