Here is a quick test of some of the more important factors that will affect the overall value of your business, should you ever decide to sell it. Score each of the questions on a scale of 1-10 (as indicated against each question) and see what your overall score means below.
- How would your business perform if you were out of action for 3 months and unable to work? (1 – Very badly; 10 – no different to normal)
- Have you got a management team in place to manage your business on a day to day basis? (1 – No management team; 10 – Team fully in place)
- Is your the industry or sector in which you operate declining or growing? (1 – declining rapidly ; 10 – increasing rapidly)
- Is your product or service only capable of being delivered in your local area? (1 – local only ; 10 – nationwide)
- How much do you customise your product or service to meet your client's demand?s (1 – tailored to each customer ; 10 – little or no customisation).
- Is your business turnover growing at the moment compared to last year? (1 – declining by more than 25% ; 10 – increasing by more than 25%)
- What is your market share? (1 – less than 1% ; 10 – more than 20%)
What does your score mean?
- If you scored 20 or less – you may have a business of limited or no value. What can you do to improve your current situation?
- If you scored 21-34 – you have a business that is worth something but there are lots of steps you can take to develop an action plan to increase it's value significantly in the future
- If you scored 35-49 – you are in a good position to realise a sizeable sum from your business but there are still many things that you can do to maximise its value
- If you scored 50+ – congratulations, you have a business that should realise you a healthy sum when you decide to sell it (providing you can keep it where it is at the moment).
