Enterprise value is essentially what the buying price to acquire your company would be. While you may not be thinking about selling now (or ever), the value of your business is important to your overall company health and growth.
For Exit Strategy
An exit strategy is simply having a plan for when you are ready to leave your business. For some, this means handing it down to the capable management team, while for others it means selling, merging, or acquisition. Exit strategies may be planned — retirement, change of interest, or a better opportunity — or come as a surprise — health problems, loss of company value, or market declines. Whatever your reason for needing an exit strategy, you’ll want to ensure your enterprise value is as high as possible.
For Merger or Acquisitions
One of the most important financial transactions that can happen in the life of a business is a merger or acquisition. During a merger or acquisition, it is not common for the seller to get the price they had hoped for, nor does the buyer assume a company that immediately turns a profit. In addition to a high enterprise valuation, quality processes and a sound growth strategy will help you negotiate terms that are more in your favor.
To improve your enterprise value, enlist the services of a consulting firm with experience, like the team at Benchmark Consulting Group.