--- title: Business Value Drivers description: Profitability, management team, cash flow, and barriers to entry are the top value drivers in determining business value. image: https://www.tworldnorthstar.com/hubfs/accounting%20graph%20photo.jpg --- **[![phone](https://www.tworldnorthstar.com/hubfs/2020%20Website/white-phone-solid%20(1).svg "phone")(888) 290-5232](tel:888-%20290-5232)      ![envelope](https://www.tworldnorthstar.com/hubfs/2020%20Website/envelope-solid-white.svg "envelope") [northstar@tworld.com](mailto:northstar@tworld.com)** [![TRANSWORLD-LOGO-2023-2Color-VF-02](https://www.tworldnorthstar.com/hs-fs/hubfs/Tworld%20Logos/TRANSWORLD-LOGO-2023-2Color-VF-02.png?width=1801&height=600&name=TRANSWORLD-LOGO-2023-2Color-VF-02.png "TRANSWORLD-LOGO-2023-2Color-VF-02")](https://www.tworldnorthstar.com/) ![4 Team members](https://www.tworldnorthstar.com/hs-fs/hubfs/2020%20Website/Imagery/4%20Team%20members.jpeg?width=1350&name=4%20Team%20members.jpeg "4 Team members") # Transworld Blog From business brokerage to mergers and acquisitions; we are the business sale specialists. # [Business Value Drivers](https://www.tworldnorthstar.com/blog/business-value-drivers) [Read More →](https://www.tworldnorthstar.com/blog/business-value-drivers) - [buying a business](https://www.tworldnorthstar.com/blog/topic/buying-a-business) - [selling a business](https://www.tworldnorthstar.com/blog/topic/selling-a-business) - [For Entrepreneurs](https://www.tworldnorthstar.com/blog/topic/for-entrepreneurs) - [Case Studies](https://www.tworldnorthstar.com/blog/topic/case-studies) - [**](https://www.facebook.com/sharer/sharer.php?u=https%3A%2F%2Fwww.tworldnorthstar.com%2Fblog%2Fbusiness-value-drivers) - [**](https://www.twitter.com/share?url=https%3A%2F%2Fwww.tworldnorthstar.com%2Fblog%2Fbusiness-value-drivers) - [**](http://www.linkedin.com/shareArticle?mini=true&url=https://www.tworldnorthstar.com/blog/business-value-drivers) [All Posts](https://www.tworldnorthstar.com/blog) # Business Value Drivers - [Tweet](https://twitter.com/share) Ollie Newbold, head of corporate finance at Randall & Payne offers the following list of value drivers for Mergers and Acquisitions that are appropriate for businesses of all sizes. 11/26/18 Punchline-Gloucester.com **Gloucestershire Business News** **Value Drivers** - Profitability - To be in the best position for sale, your business needs to demonstrate underlying profitability and growth potential. The best scenario for a seller is to demonstrate a pattern of consistent growth. - Strong Management Team - Does your business pass 'the bus test'? If you were hit by a bus tomorrow, would your business continue to run effectively? If your business can't run itself without you, then this is something you need to address. - Healthy Cash Flow - With poor cash flow often being the cause of business failure having a healthy cash and working capital position demonstrates that your business has been run efficiently and effectively. - Barriers to Entry - Barriers to entry will increase the value of your company. Intellectual property, high capital investment and advanced technology are all factors that create barriers to entry which can maximize the value of the business. - Clear Strategy - A buyer will often want to see that a business has been run with clear strategic objectives in place that management have bought into. - High Customer Concentration - Business value can be significantly eroded where one customer accounts for a significant portion of your turnover. The ideal remedy for this is to dilute this proportion by winning more customers, however, some businesses may find themselves in a position where they cannot avoid high levels of customer concentration - in this scenario it is best to try and put robust contracts in place, thus providing some visibility of future income. - Capital Expenditure - Are the assets that are required in the day-to-day running of your business in good shape? Assets should be up-to-date and well maintained to ensure that productivity levels are high and the benefits of this subsequently filter through to improve financial performance. - Customer Satisfaction Rates - In a world heavily focused on social media, customer satisfaction must be at the forefront of every business owner's mind. Negative customer feedback, particularly on a regular basis, highlights poor customer service which has a detrimental impact on value. ![Josh Klassen](https://www.tworldnorthstar.com/hubfs/Employee_Profiles/josh.jpg) ###### Josh Klassen As a Business Advisor for Transworld Business Advisors of Minnesota, I am directly involved with helping people looking to buy or sell a business. My experience has included being a commodity trader and investor for a private company based in Oregon, and working for a full service brokerage and investment firm in Minnesota. I graduated with a degree in business from a private college in Minnesota. While running my own business in college, I found my passion for business entrepreneurship. This passion has grown into a desire to help business owners who are looking to sell and move on to the next phase of life, as well as helping entrepreneurs and prospective buyers find what suits them. In my free time, I enjoy being in the outdoors, camping, hiking, and playing sports. 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Where you might imagine pop-up tent trailers going for $15–20K, the owner and his team specialized in high-end adventure vans, or “Class B” RVs, ranging between $100–200K. - [Transworld Business Advisors](https://www.tworldnorthstar.com/blog/author/transworld-business-advisors) - 4 min read - Jan 11, 2024 3:17:00 PM ## [Case Study: How Transworld Helped PWC Sell Their Business in 7 Months](https://www.tworldnorthstar.com/blog/case-study-how-transworld-helped-pwc-sell-their-business-in-7-months)   Sales Timeline: 7 Months   The Background Professional Wireless Communications. Inc. (PWC) has provided reliable and affordable two-way radio solutions in Minnesota and Iowa for 25 years. The company has a loyal and diverse clientele, from schools and hotels to casinos and stores. Pat and Paula Green, a husband-and-wife duo, started the business from scratch. With Mark, their salesperson and 20% owner, they have built a profitable and reputable enterprise. As they neared retirement, the Greens wanted to sell the company and focus on family. Mark also desired to sell, but remain employed by PWC. - [Transworld Business Advisors](https://www.tworldnorthstar.com/blog/author/transworld-business-advisors) - 4 min read - Aug 24, 2023 9:00:00 AM ## [Case Study: Selling a Pet-Sitting Business in Less Than 4 Months](https://www.tworldnorthstar.com/blog/case-study-selling-a-pet-sitting-business-in-less-than-four-months)   Sales Timeline: Less than 4 months Sale Price: $320k   The Background Located in the Twin Cities, the owner of Whiskers to Tails Petsitting had proven to be a successful entrepreneur focused on providing care for animals in the home. 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