Improve Business Value to Strengthen Your Exit Strategy
If you put two businesses side by side with the same revenue, the same industry, and even the same customer base, one might sell for twice as much as the other.?
Why??
Because buyers aren’t just paying for what exists today—they’re paying for what they can count on tomorrow.
Buyers want something they can step into without wondering what problems will surface after the ink dries. A business that feels like a safe bet will always command top dollar. If they see risk—unsteady cash flow, an overreliance on the owner, a lack of transparent processes—they’ll either walk away or lower their offer to hedge against uncertainty.
That’s why we stress the importance of early exit planning– Being proactive gives you room to make adjustments that genuinely improve business value, which means more power at the negotiating table.
Reducing Buyer Hesitations by Addressing the Gaps
When a buyer considers the value of a particular business investment, they want to understand the risk involved. Anything that feels unpredictable or unreliable is a reason to hesitate, so smoothing over those weak spots now will paint a much more appealing picture when you’re ready for your exit transition.?
Create Predictable Recurring Revenue Streams
Uncertainty about future cash flow is one of the biggest concerns for buyers, so if you rely on sporadic or seasonal sales to keep your business afloat, it’s time to start diversifying your revenue.??
Some industries lend themselves naturally to subscriptions, where customers pay regularly for continued access to a product, service, or exclusive benefits. This model is standard in software companies that offer monthly or annual plans, but it can extend to gyms, meal delivery services, and more recently, curated collections of retail goods, AKA subscription boxes.?
For businesses that operate on a client-based model, locking in long-term agreements provides the same stability as a subscription. Retainer-based contracts are tangible proof of prepaid services and long-term customer commitment, so it’s the model to aim for if you’re selling a consulting or similar service-based business.?
Make Your Operations More Efficient
Want a quick, easy win? Start with your operations.?
Disorganization kills deals. No buyer wants to pick up where you left off, only to experience a painful transition of undocumented processes and confusing workflows. The easier you make it for them to step in and keep things running, the more valuable your business becomes.
When workflows and processes are well-documented, buyers can see exactly how the business runs and where the revenue comes from without deciphering a mess of unwritten rules.
Reduce Owner Dependency
A business that can’t function without its owner isn’t really a business. It’s closer to a job that a buyer has to take on with all of the responsibility and none of the autonomy.?
Step back and honestly assess how much of the daily operations hinge on your presence.
If every decision rests on your shoulders, it’s a problem because the future owner wants to be able to step into their role without unnecessary disruption. If they see a fragile structure held together by your direct involvement, there’s a good chance they’ll push for a lower price to offset the uncertainty, and that’s the best-case scenario. Worst case, they’ll think it’s not worth the trouble.?
The best way to remove yourself from the center of the business is to start distributing responsibility now:
Maximizing Existing Business Value
Before you get too caught up thinking about everything you need to improve, remember that your most valuable assets might be the ones you’ve already secured. Intangibles are just as important to buyers because they’re much more challenging to replicate, so if you can prove that you have a competitive advantage due to brand reputation, a loyal customer base, or intellectual property, it’ll give you even more leverage.?
Cultivate a Positive Brand Reputation
Trust can’t be manufactured overnight, so a business with a strong reputation has already done the heavy lifting of earning market credibility. Buyers see that as an obvious bonus, especially if the brand carries that weight even without the owner’s influence.?
Lean into your brand trust and document examples of media mentions, awards, third-party endorsements, online reviews, and any other evidence you have that people love what your company has to offer.? Buyers know that reputation alone can drive sales and lower marketing costs, so a business that doesn’t have to prove itself from scratch is a much more attractive acquisition.?
Earn a Loyal Customer Base
Look online for statistics on the cost difference between acquiring a new customer vs. retaining one, and all sources point to a Harvard Business Review article from 2014. Sure, the study might be a decade old, but even then, it reported that acquisitions can cost between five and 25 times more than retention.?
Pair that with the fact that from 2020 to 2025, CAC jumped by 60%, and, if anything, the HBR data paints a much rosier picture than reality. Buyers know that acquiring customers has never been more expensive, so businesses with strong retention rates carry a major competitive advantage.
A buyer stepping into a business with a loyal customer base is inheriting long-term, demonstrable revenue stability. That’s an entirely different proposition from taking over a company where monthly profits are eaten up trying to replace lost sales with new ones.
Protect Intellectual Property
Finally, if you’ve created some kind of asset that makes your company more defensible in a competitive market– patents, trademarks, etc.- then serious buyers will be ready and willing to pay a premium.
Patents and trademarks are the most apparent forms of protection, but intellectual property isn’t limited to legally registered assets. Your willingness to part with proprietary formulas, trade secrets, custom software, or even a specialized method of service delivery should be rewarded with an increased sale price.?
However, an asset only holds value if it’s properly secured. Before going to market, make sure everything is legally protected and transferable to a new owner.
Small Adjustments Can Make a Big Impact
A business that sells at the right price, on the right terms, doesn’t come together at the last minute. You need to start making these changes now so that, by the time you’re ready to exit, you’ll have a business buyers are eager to compete for.
Don’t leave money on the table when it’s time to sell. Schedule a consultation with Lori Moen of Catalyst Group ECR and get expert guidance from a Certified Exit Planning Advisor on making your business as valuable as possible.?