Your Company Might Be Worth $500,000 Less Than You Think, Thanks to Your IT

Let’s face facts… once you’ve spent enough time and money investing in your business, you’re going to want to see some return when the time comes for you to move along and let someone else take the reins. Whether that time is now or years away, there’s a critical element to keep in mind: any buyer won’t just be buying your business and its resources… they’re also buying any problems that come with it.

Therefore, instead of having your asking price suddenly chopped down when a potential buyer conducts their due diligence and discovers significant risks, investing in your IT now can generate significant returns when the time comes to divest from your company.

What IT Issues Will a Buyer Spot (and Use Against You)?

There are a few easy-to-spot concerns that any savvy buyer will watch out for and—very understandably—try to negotiate a lower asking price by mentioning. The big three are as follows:

Your Business Currently Relies on One Cornerstone Employee

Let’s say that just one person in your whole business knows how a certain system operates or how specific processes play out. Perhaps Kimberly is the only one who knows how the payroll system works, or maybe Jerry is the only one with a clear understanding of how a server is configured. Cases like these are terrifying to potential buyers.

With no documentation to reference, a large portion of the value a buyer is paying for relies on the people working there being available. If a key person leaves and they were the only one prepared to fulfill a critical task, the business is suddenly struggling to maintain its operations until someone else can be trained up. This is not something that a potential buyer will want to deal with.

Your Business’ Data is a Confusing Mess

If your business is currently relying on a patchwork quilt of technology—all of different ages and requiring workarounds to almost function—you’re making things far more difficult for yourself. For instance, your data is almost certainly stored across the network in a scrambled and disorganized manner.

When they see this kind of mess, many potential buyers will be deterred by the additional cost of sorting through, consolidating, and updating your data and systems. These costs are generally considered technical debt, which adds to the price you’ve already set. This makes it all the more vital that you ensure your technology is maintained correctly and is ready to go before your business goes on the market.

You’re Just Waiting to Muddle Through the Next Big Issue

If your business currently falls short in its essential business continuity preventative measures—you can’t demonstrate the cybersecurity you have in place, for instance, or your backup and data recovery strategies rely very heavily on luck—your prospective buyer will immediately start seeing red flags.

After all, they’re looking to purchase a stable, established business, but without these kinds of safeguards, what they’re actually purchasing is a gamble. With each and every vulnerability your infrastructure features, the number of dollars these vulnerabilities and risks could cost the buyer significantly increases. As such, a smart buyer will demand a substantial price reduction, and that’s assuming they don’t just walk away.

How to Fix These IT Issues and Add Value to Your Business

Document Everything

Instead of keeping knowledge sequestered in the minds of your individual employees, turn them into standard operating procedures recorded in a company playbook. This ensures that the knowledge you and your team need stays with you.

Simplify the Technology You Rely On

Instead of complicating your business routines with numerous software and hardware, standardize everything you do so that it relies on the fewest steps and tools possible. The more straightforward your business tech stack is, the better.

Make Your Security Clear

Ensure that you have all the essential data protections in place, including multifactor authentication and employee training. Even this isn’t enough, though, as you always need to have a comprehensive backup strategy in place in case things go wrong.

Add Zeroes to Your Company’s Value Through Increased Stability

The easier you make it for someone new to walk in and pick up where you left off (without having to worry unduly about security issues or overly complex processes), the more you’ll be able to make in an honest sale… and to be honest, the more you’ll be able to generate through your operations, too.

Whether or not you’re looking to sell your business, it pays to undergo an IT assessment, which we can help you complete. Give us a call at (954) 739-4700 to schedule one!