Your Valuation Is Complete — What's Next?

If you’ve had a recent valuation, what areas should you consider? Should you plan to expand, maintain, or sell your business? Whatever you decide, make plans that will increase your business’ operational value.

Will-Call or Keep-Full? One of the more straightforward improvements a business owner can make is a conscious effort to shift your customer base from Will-Call to Keep-Full (or Routed) customers. Switching customers to Keep-Full can be achieved by a pricing incentive to change or by mandating leased tanks are fixed as Keep-Full.

Efficient Routing. An underrated and often overlooked aspect of a business is its service territory and customer density. We all want to grow our company because it is vital strategically. Business owners should focus on the density of their customers rather than the service range. Boasting a widespread service territory doesn’t directly equate to more value.

Income Stream Diversify. Buyers are looking for companies with diverse revenue streams. Gallon sales are critical, but owners need to have other supporting income. Implementing or growing your supplemental income streams, like tank rent, service labor, and fees, will increase the value of your organization.

Prioritize Profit & Loss Statements. Our experience has shown that most business owners do not have a solid grasp of their company’s Profit & Loss Statement. Understanding this financial document should be a priority for you and your management team.

Common oversights can be:

• grouping too many expenses into one line item
• or miscoding expenses into the wrong line item

Data input is super critical to providing an accurate picture of your operation. A good practice to consider implementing is a quarterly or bi-annual review of your Profit and Loss Statement. Reviewing your Profit & Loss Statement can be a valuable tool for business owners.

Corporation Filing Considerations. Most propane companies began as C-Corps for the security C-Corps provided to the founding party. If your company has become established within the community, have you considered the perks of transitioning into an S-Corp with your CPA or attorney? The consideration of becoming an S-Corp is essential as you move closer to a sale and exit the industry.

This article is an excerpt from a more extensive article by Adam Zoellner, Manager of Consulting and Acquisitions at Propane Resources. It was published earlier this year in the exclusive?Leadership Guideposts?newsletter, a?Propane Resources, LLC?service.

Propane Resources has been a leader in propane supply, marketing, human resources, consulting, and business sales since 1992. For questions or more information about this topic, call Adam at 913-262-8345 or email him at?[email protected]. For more information about Propane Resources, please visit our website:?https://PropaneResources.com