Beyond COVID-19 – How to build value in your business

Business Development Specialist - Ceebeks Business Solutions for GOOD
I have said it before and I’ll say it again – this has been an extremely difficult few months for all of us, but there is no better time to think seriously about your business. In this article, I have compiled a few tips to create value in your business.
The key to building value in your business is to plan the process in a systematic way, whether you’re aiming to grow your business or groom it to get a better price from a buyer.
Looking through the eyes of buyers
Whether you just want to build a stronger business, or you’re looking ahead to the day when you might want to sell it, it helps to think of your business through the eyes of a buyer. Aim to:
  • Identify any weaknesses they might see in your business & what you can do about them.
  • Think about the strengths that may attract buyers & how you can reinforce these strengths.
Work on stability
The longer your business has been operating, the easier it could be to sell, provided it has a solid track record. Aspire to:
  • Keep well-documented business performance & tax records.
  • Document business history & projects completed, or customers gained.
Develop reliable markets
A strong history is reassuring, but buyers will be more interested in the future. Make sure you:
  • Show evidence that your main markets are growing or at least stable rather than declining.
  • Demonstrate you’ve taken steps to change your market position, if necessary. For example, a motel may be able to grow by making steady improvements to its facilities, moving up market &, therefore, increasing its prices.
Nurture a stable customer base
A well-managed customer database is one of the most valuable assets as it can be used in many ways for marketing & gaining referrals. Try to:
  • Improve & update your customer database.
  • Start measuring customer retention rates & customer referral rates.
  • Implement a customer loyalty program & referral incentives. Buyers will want to know that key customers won’t leave if you do.
Secure your cash flows
Stable future cash flows are critical to the value of a business. Buyers will want evidence of reliable revenue streams coming into the business. Aim to:
  • Start building more diversity & therefore resilience into your customer base if you’re too reliant on a few major customers.
  • Look for ways to develop more revenue streams by adding extra services or products, & lock in stable revenues through customer loyalty programs & contracts.
Maintain tight financial control
Excellent financial management will show up in your credit history – something you can be sure a buyer will check out. Plan to:
  • Keep improving your money management skills through cash flow, profit forecasts & budget reports.
  • Show you understand & monitor the key performance drivers in your business.
  • Demonstrate that you have credit management under control & that your average debt collection time is at least as good as the industry average.
Develop great business systems
Excellent business systems add considerable value to any business because they allow you to spend more time working on your business rather than in it. They also make the transition to new ownership much easier. Make sure you:
  • Prepare your business as if you’re planning to franchise it.
  • Start building an operating manual that documents all processes in simple, easy-to-understand steps.
  • Show how good systems enable faster training & help staff cover for absent employees.
Grow your brand
A buyer will see significant value in an established & respected brand that differentiates your business from competitors. Aim to:
  • Work on developing a brand that captures the essence & unique selling points of your business.
  • Take any necessary steps to enhance or reinvent your branding.
Protect your intellectual property (IP)
Intellectual property can add considerable value to your business, but only if it’s well protected. Ensure you:
  • Protect your logo & brand as a trademark.
  • Consult a patent attorney or IP expert about protecting any designs, inventions, copyright material, or other IP that will add value.
Build strategic alliances
Strategic alliances can be important sources of growth & added value. Be sure to:
  • Consider what extra skills & resources you lack to exploit opportunities you’re missing.
  • List & approach businesses that could help you gain work that your business couldn’t normally deliver on its own.
  • Contact businesses that have more extensive distribution & sales channels.
Got a question about your business? Please don’t hesitate to ask.
Business Development Specialist - Ceebeks Business Solutions for GOOD