We spend most of our time investigating and assessing the value of a business, and often provide advice on how to increase the value of a business. So it is great to hear success stories of people that have gone through the process.
In the video below, Mike Finger of Exit Oasis details what he did to dramatically increase the value of a car wash business he bought and then sold five years later. The original video was posted here.
He focused on five simple steps:
Improving the job
Build a team
Keep clean records
One of the recurring themes in this video is that they implemented things - even though they weren't perfect. So many times I hear of business owners that didn't follow through on great ideas because they weren't happy with some aspects of the initiative. Execution trumps strategy every time - if you don't execute ideas it doesn't matter how good the strategy.
He also used service providers in an innovative way to reduce the reliance on himself. Single owner businesses can make the business less about them and more reliant on other resources without taking on employees, but you need to develop strategic alliances that fill the void.
The business was sold for 47% more than the purchase price after four years - and he enjoyed increasing profits along the way.
This was inherently a simple business and the improvements, whilst not perfect were mostly simple. He applied innovation and consistently looked for better results.
A lot of the initiatives and strategies match the key features we, as business valuation experts, associate with highly valuable businesses.
Size and scale (and growth)
Use of technology
Reduced key person risk
Improved management reporting
These key features are not all compulsory to create a highly valuable business, as not all businesses need all features. However we have found that all the highly valuable business we have valued have some or all of these as dominant features.
If you want to find out the details we often look for in a valuable business subscribe to our Highly Valuable Business Checklists and we will send you a checklist each week over four weeks.
Mike Finger is a successful small business owner. Over the last 25 years Mike has bought, built and sold multiple businesses. Building his first business was a rewarding challenge, but what really captivated him was selling his first business.
This video originally appeared at: