I have said it before and I’ll say it again – this has been an extremely difficult year for all of us, but there is no better time to think seriously about your business. In this article, I have compiled 10 tips to create value in your business.
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 and what you can do about them.
- Think about the strengths that may attract buyers and 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 and tax records.
- Document business history and projects completed, or customers gained.
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 and gaining referrals. Try to:
- Improve and update your customer database.
- Start measuring customer retention rates and customer referral rates.
- Implement a customer loyalty program and 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 and 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, and lock in stable revenues through customer loyalty programs and contracts.
Refine marketing tactics that work
Buyers will want to know what tactics have worked best for your business. Ensure you:
- Document your marketing strategy and your promotional tactics for the next 12 months.
- Demonstrate how you measure all marketing to identify the best and eliminate what isn’t working.
- Identify what you’re doing to expand your markets and distribution channels.
- List some still unexplored areas that could offer potential, such as a better website or social media marketing.
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 and profit forecasts and budget reports.
- Show you understand and monitor the key performance drivers in your business.
- Demonstrate that you have credit management under control and 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 and help staff cover for absent employees.
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 and 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 and added value. Be sure to:
- Consider what extra skills and resources you lack to exploit opportunities you’re missing.
- List and 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 and sales channels.
Lock-in key employees
Dedicated and experienced staff can be a key asset in the eyes of a buyer, especially if they’ve helped you create a valuable business. Plan to:
- Ensure you provide opportunities for career progression and use incentives to align pay with the value that your staff create.
- Make your business an attractive place to work. Good working conditions and competitive wages will help to retain skilled staff.
- Look for people who can create value for your business, and managers with transferable skills who can help you build growth.
Got a question about your business? Give us a call on 5561 2643, as business development specialists we can help you create the business you’ve always WANTED.
Business Development Specialist - Ceebeks Business Solutions for GOOD
I love business and the ability to change people’s lives through them!
At Ceebeks Business Solutions for GOOD, we get up every morning to positively impact young families in business by making their businesses REALLY work so that we all make an even bigger impact together. The rewards that bring allow our team ('the fantastic five') to make small but powerful contributions to impact our local community, our country and the lives of those less fortunate around the world.
You see, something quite remarkable happens when we work together, for example, the gift of water is made when we prepare a tax return, the gift of a goat is provided when we help a new business start-up, the gift of shelter is forwarded when we organise a home loan. When we work together, we actually change the world!
I am a business development specialist with nearly 40 years’ experience, a CPA, an authorised representative of Avana Financial Solutions Ltd (Authorised Representative no. 231937) and a credit representative of Outsource Financial Pty Ltd (Authorised Representative no 396061). I have recently co-authored an International Best-Selling Book 'Legacy - The Sustainable Development Goals in Action' and in 2020 published my first book - 'Chasing the Dream! - How to Grow a Business in these Amazing Times', host a daily blog/vlog on our small business Facebook community group page 'Chasing the Dream, and with our Team run a monthly event for small business owners called 'The Chasers Meet-Up', where a guest speaker presents a topic and tips and strategies are openly shared.
In 2015, our business won the Change GPS International Member Firm of the Year and in that same year, I was a founding member of the Global Accounting Movement - Accountants for Good. We were recognised in 2016 by Steve Pipe in his international publication - The World's Most Inspiring Accountants and Featured in "The LinkedIn PlayBook" by world-renowned social media strategist and consultant, Adam Houlahan. In 2017, we were in the Top 25 Most Popular Accounting and Tax Services Award for search4accountants, B1G1 Business for Good Top 100 Giving Businesses in the World and a Semi-Finalist in the 2017 Victorian Regional Achievement and Community Awards. In 2018, we were an Australian Accounting Awards Finalist in "Community Engagement Program of the Year", a Semi-Finalist in the Victorian Regional Achievement and Community Awards 'South West TAFE & Deakin University South West Regional Achiever Award', a Nominee in the Victorian Regional Achievement and Community Awards 'Regional Development Victoria Business Achiever Award', and featured in the Top 25 Most Popular Accounting and Tax Services Award by search4accountants.