The value and transferability of a business is partially determined by your industry. For example, these days cloud-based software companies are considered more valuable than printing companies. However, when analyzing businesses in the same industry, there are major variations in valuation.

The following are 10 ways that first generation family business owners can make their business more valuable and transferable.

1. Clean Financials: Owning and operating a business with reliable and supportable financial statements is more trustworthy and valuable to a buyer. You’ll be better rewarded if you have your financials prepared professionally each year, and even better if audited.

2. Experienced, Reliable Team: Running a business with a strong management team that’s not dependent upon the owner to function is more valuable than a business where all the knowledge and decision-making is relying upon you as the owner.

3. Recurring Revenues: The more revenues automatically recurring from contracts or subscriptions make your business more valuable to an acquirer.

4. Something Different: Potential acquirers want what they can’t easily replicate on their own. Therefore, businesses with a unique product or service are more valuable and sellable than one which offers the same as what every other business in the industry is offering.

5. Growth: Buyers looking to increase their top-line revenue growth through acquisition are willing to pay a premium for your business if it is growing faster than your industry overall.

6. Trendsetting: Unexciting, older companies often are wanting to acquire a young, trendy company in their industry, and are willing to pay a premium.

7. Location: If you are located in an area that is strategically attractive for an acquirer, they will be willing to pay more for the availability.

8. Diversity: A business with a diversified customer/client base is hedged against the vulnerability of attrition. Having no more than 10% of your revenues from a single customer/client is less risky and more appealing to a buyer.

9. Predictability: If you have sources of revenue that are reliably consistent and growing, your business is more valuable than one which has to constantly scramble to find new customers/clients.

10. Happy Clients/Customers: Objectively tracking client/customer satisfaction through structured feedback programs are a means to make certain that your sources of revenue are happy, and will repurchase in the future and refer others. This makes your business more valuable and transferable

If you’re a first generation family business owner, find out how your business currently scores in these 10 areas. Take 13 minutes to fill out the Value Builder Score questionnaire and get a free, no obligation personalized report for your business.