“What value do you place on your team?” Article by Steve Marsten

We were recently involved in a sale of a business. Often this is a stressful decision because in many cases owners who work in the business have developed a second family. That’s their staff! So when they sell, who they sell to, can be as important as the price.

The business we were dealing with was a long standing business and had become more profitable each year mainly due to the improvements in systems and investments made by the owners in technology. They also had a team who embraced the improvements. However when it came to the business valuation, we felt that it was undervalued. It’s quite easy to value a business based on the dollars and cents and many think that it is fairly straight forward. The issue is that there can be more subjective value which can be considerably harder to place a figure on. 

You see, it’s not the technology or the product or service that makes a company great, it’s the people. Companies who see their good employees as “replaceable” have things out of whack. Good employees are not replaceable. Let me clarify what I mean by “replaceable”. Can a company hire someone to fill a position to replace someone else? Of course they can. In today’s market, the world is ripe with candidates who are eager and willing to take the job. But sitting someone in a seat doesn’t replace a great employee. It simply puts a new behind in a seat.

Often it’s not just the one employee that makes a great business– it’s the team of employees. Teams that want to work with the owners of the business; enjoy working with the owners of the business and share in the ups and downs of that business - are a valuable resource. When we sell the business it can be a big culture shock both to the owners and the team. If the team are by and large staying on, then the buyers should give consideration to that value.

At Sothertons we can assist in realising the complete value of your business by making sure the subjective value is not forgotten. Call us on 07 4972 1300 or visit our website.