10 ways to Increase the Value of Your Business
Warren Buffett once said “Price is what you pay, Value is what you get”. His classic quote reminds us that we must first look to Value rather than Price. That Price is rarely an arbitrary number. One of the most difficult perspectives for the family and founders of privately held businesses is that Value is a snapshot; not a movie. By that, I mean that families and founders tend to view Value as a composite of all that has transpired to bring us to today. Conversely, investors/buyers only take a snapshot of today. One day, one time; a two dimensional view of the company/facility as it exists today. During the due diligence phase of any sale/purchase the investors will look at every aspect of the business including financials, interviews, and a physical inspection. Here are a couple of things to consider:
Real estate is the foundation of the value of Self Storage facilities, but it will not, by itself, generate the price most families and founders want to realize from a sale. Our holistic approach to business valuation takes numerous factors into consideration in helping owners position their business to its best Value.
Does your business have structure, policies, a business plan, financial systems and automation. Is there a process to insure the policies are being followed.
Management and Staff:
If you took a 30 day cruise without a phone; what would be the impact on your business? Investors want to know that your business can stand on its own? Are your managers well trained, having sufficient authority to truly manage the business? Are employees reasonably compensated? Do you have regular performance reviews an investor can review?
Well Maintained Facility:
Deferred maintenance equates to “Curb Appeal” and investors extrapolate their first opinion… or, in other terms, what they can see in order to make assumptions about what they can’t see. The first tour of the property sets the tone for the due diligence process. Truly, the devil is in the details. The manager must have a ongoing minor maintenance list, and the owners must have a major maintenance plan.
It’s not just automated access. Automation of accounting, management reports, policy compliance, all play a part in the story you tell about the potential transition of the business.
Being able to quickly respond to an investors request for financial information and the ability to “slice” the information in a way that you don’t normally use it is essential to achieving maximum value.
Carpe diem; You know that this is Latin for “seize the day,” right? Leaders always remember that every new day is a new opportunity. You can’t rest on yesterday’s accomplishments. Client satisfaction starts at the top. Passionate maintenance, passionate sales, and passionate customer service come directly from the owner.
Is you Business “Current”:
Paint, decor, marketing, additional service, maintenance, training, and more. Regardless of the size or number of facilities; investors want to see a business poised for the future.
A Story to Tell:
Even if all of the above is “state of the art”, you still have to tell your story. We will help you add value at every step of the way.
Rinse and Repeat:
And when it’s all done, do it again. Day after day, keep your business current to insure Maximum Value.