Day 3

Increase sales – consistently!

A good place to start if we want to make more profit is with sales, although bear in mind that this alone is not enough (“turnover is vanity, profit is sanity”!).

Buyers will look at the historic growth in your sales – they’ll see this as an indicator of likely future growth; without historic growth, it’s difficult to persuade a buyer that future sales are set to rise – why would they believe you without that track record? Confidence in the future is likely to mean they’re prepared to pay a bigger multiple of current profit. Declining sales would be a real cause for concern for buyers, so avoid this at all costs.

There’s an argument that, for some buyers, sales growth is more important than profit growth – the reason being that they might already have plans to take out a lot of your costs, so your ‘bottom line’ profit could be of less interest to them than your turnover. And the more consistent your sales growth has been the better.