Adding Value to a Business with Recurring Revenue Streams
When approaching the decision to sell a business, owners will consider the valuation before jumping in. For many business owners, the valuation often comes in lower than expected – and to fund the rest of their life post-sale, owners may need to increase the business value before considering a sale.
Our experienced Omaha business brokers often suggest adding a recurring revenue stream to add value to a business. Examples of recurring revenue streams are subscriptions, auto-charged monthly or yearly service agreements, memberships or consumable products. Buyers want revenue and cash flow that will grow at a steady rate, and a recurring revenue stream can be a great way to increase the value of the business in the eyes of a potential buyer. Recurring revenue streams will also enhance future growth potential, which is very attractive to buyers.
Considering a recurring revenue stream to increase business value for an attractive sale is a decision that will pay off long-term – for both the current and future business owner. Planning in advance with a professional Omaha business broker for a business sale will improve the chances of a successful business sale down the road.