If you’ve decided that it’s time to sell, you should work towards getting a high business valuation. Minnesota has a healthy economy, so you’re likely to face stiff competition. A high independent valuation adds credibility to your negotiating position and lets you start the proceedings at a higher price. Here are X factors that impact your valuation.
Market Trends
The health of your industry sector is one thing that can impact your business valuation. Minnesota economy has a healthy outlook overall, but according to research by Minnesota State, the five sectors with the best growth potential to 2024 are ambulatory health care services, retail stores such as sporting goods stores, hobby stores, book stores and music stores, nursing/residential care, warehousing and storage, and construction/engineering.
Existing Client Base
To achieve a sky-high business valuation in Minnesota, you need to demonstrate potential future income. And while good present financials are not going to hurt you, they don’t always tell the story about the future. A solid client base and good relationships with those businesses says a lot more — especially if you have established contracts with these clients.
A Solid Team
The collective brainpower of your staff can also be a huge asset, especially if you’re in the so-called “knowledge economy,” such as financial services, business services, or IT. If you can sell the skills and experience of your people and demonstrate that they will be staying with the business through the transition, that will be a huge selling point.
Location
In the digital age, many businesses are location-independent, but this is certainly not always the case, and location is often a key factor in your business valuation. For example, Minnesota has some huge shopping centers, such as the Mall of America or the Southdale Center. A retail business here or nearby will, of course, attract a favorable valuation.
Not all factors affecting the valuation of your business can be controlled. But they can affect your decision to sell in other ways, for example, waiting for more favorable economic conditions before selling. Put your efforts into improving the factors you can control and you can improve your business’s valuation.
