How to Increase the Valuation of Your Business with Aryeh Sheinbein
“How can I make more sales” is top of mind for most entrepreneurs, but entrepreneurs can do even better in their business by focusing on valuation. Valuation has to do with the amount of money a willing buyer would spend to buy your business.
Even if you never intend to sell your business, increasing its valuation gives you access to creative ways to increase profits and take money out of the business without focusing solely on sales.
In this episode of Just The Tips, James and Dean welcome Aryeh Sheinbein for his second appearance on the show. This time Aryeh is sharing his best strategies for increasing the valuation of your business.
Think of it like home equity
Even if you don’t intend to sell your home, making improvements to it makes it more valuable. That may come in handy if you ever want to tap into its equity. It’s the same with your business. You may not intend to sell it, but making the kinds of improvements Aryeh reveals in this episode will make it more valuable (and more profitable).
Raising prices isn’t the only way
There are multiple ways to increase profit margins without raising prices. For example, making small tweaks to reduce expenses while maintaining quality and service can grow your cash flow without requiring customers to spend more money. Small reductions in expenses really add up. Tune into this episode for additional examples of ways you can increase profits without relying on product price increases.
The power of recurring revenue
Most people hear the phrase recurring revenue and think of subscriptions. Subscriptions are definitely the most common example, but they aren’t the only example. Any way you can inspire customers to spend money more frequently with you contributes to recurring revenue. It might be with ancillary products, bonuses, bundles, and any other number of strategies. Tune in to get more ideas of recurring revenue (plus hear why engaged customers, even if they aren’t your biggest spenders, still contribute to your business valuation).
Scared of business debt?
Reckless consumer debt and strategic business financing are often lumped into the “bad” category. But the truth is many of the world’s top entrepreneurs and real estate investors use strategic financing to their advantage and reap the rewards thousands of times over. Companies that sell physical products can especially benefit from strategic financing.
Don’t settle for “sounds good”
The higher your business’s valuation, the more attractive it is to potential investors. Even if you’re not planning to sell the whole business, you may decide you want to bring on investors. If you decide to do that, absolutely do not use spoken agreements or back and forth emails as your “agreement.” Get official terms drafted up, in writing, by a qualified expert. Yes, it’s more work, but it’s also for your protection.
Outline of This Episode
- Even if you’re not going to sell, increase the valuation [8:01]
- How to improve margins without raising prices [12:50]
- Increase the average order value [21:55]
- A billion dollar valuation without a dime of revenue [26:15]
- How, why, and when to use financing [29:03]
- You don’t have to sell ALL of your business [35:13]
- Get it in writing [39:30]
Resources & People Mentioned
- www.SolutionAdvisory.com
- www.InsideTheLionsDen.com
- On Instagram: @aryehthebusinessman
- Guest on YouTube
- Inside The Lion’s Den Podcast: https://insidethelionsdenpodcast.com/
Music for “Just The Tips” is titled, “Happy Happy Game Show” by Kevin MacLeod (http://incompetech.com) Licensed under Creative Commons: By Attribution 3.0 License
