From: Bizjournals

This time of year, silly spooks come lurking door to door, demanding treats through the threat of tricks. However, we all know their real trick is just getting us to pass out candy by the handful to avoid their mischief.

In the spirit of the season, I have a few tricks of my own. As your employees bring in their leftover candy, apply these tricks to your business to achieve the real treat: a higher valuation!

1. Maximize profitability and earnings:

The number one component in business valuation is profitability. Whether looking for a salary to support their lifestyle or a precise level of return on their investment, a buyer will need to identify what they can expect to earn if they buy your business. The more profitable your business is, the more it’s worth.

2. Ensure your financials are clean and organized:

If profitability is the most important factor in business valuation, clearly stating and demonstrating that profitability is a close second. Nothing builds the confidence of your buyer like clean and well-maintained books and records.

3. Show positive trends and consistency:

A buyer will be buying your future profitability, and their willingness to pay you top dollar will be built on growth trends and consistency in expense management. You want them to know what to expect as they move forward with your company.

4. Document your infrastructure

A well-documented organization chart can go a long way. Make sure your buyer knows exactly who in your company is responsible for what. When they show up the first day after taking over the reins, they need to know how all those people function.

5. Build and document strong internal processes

When it’s time to sell, you want to be rewarded for all you have built. You may have your processes, your way of doing things, well-defined in your head, but unless it is written down in a binder somewhere, a buyer won’t have the confidence that they can make it their own.