« Seven Ways to KNOW Your Competition | Main | Planning a Successful Exit Strategy »

How to Value a Business Before You Buy It

How to Value a Business Before You Buy It :: Contracting Business


You should read this article whether you are planning to buy or sell a business or just want to run a company as efficiently as possible.

The same metrics that make a business valuable to a buyer also make the business run well.

Design your financial systems and reporting to provide rapid feedback on the same key metrics that are used to judge business value.

Teach your team what the metrics are and how their actions affect them.

Share key metrics on a regular basis.

Produce detailed monthly financial statements with a narrative discussing the key metrics, how they have changed and what changes are coming.

Follow these practices and you will be rewarded almost immediately with a company that runs better and a team that feels more involved. Continue down that path for 2-3 years and you will be rewarded with a huge increase in value.

Posted by David on December 24, 2005 12:01 PM|Permalink

TrackBack

TrackBack URL for this entry:
http://www.dbrownonline.com/mt/mt-tb.cgi/45