Tuesday, 16 August 2011
Business Owners ‘Add value to your business’
In today’s business world it’s not just about survival, it’s also about creating sustainable value and profitability!
But what elements of your business are capable of creating value? Or perhaps more important, what elements of your business are capable of destroying value? Take a critical view of your business and identify what creates and drives value, with this approach focus on the key 8-10 critical areas.
There are many value drivers identified in businesses, here are a couple to get you started:
· Proprietary Technology
Has your company developed a unique application, tool or technology? If so, does it give you a competitive advantage? Leveraging proprietary innovation or intellectual property can produce higher sales levels or minimize operating expenses. Either way, positioned as a key value driver, proprietary technology and intellectual property positively affect a business’s multiple and its value to buyers.
· Loyal Employees
A savvy business buyer will be looking for opportunities where the current staff and management will remain in place, after the current owner exits the business. A loyal and dedicated staff will be highly valuable to a prospective buyer and thus be a value driver in your business.
· Customer Satisfaction
Are your customers satisfaction based on great products or services, or lowest price? Perhaps more importantly, do you have a system in place to identify those loyal customers and a means to communicate with them? Once you can answer this question, start using the information to drive sales and value in your company.
I realize it can be easy to be distracted by all the demands on a business owner’s time. Making a list of your company’s strengths and weaknesses doesn’t exactly produce top line sales. Often times it’s difficult to see why spending an afternoon doing some critical thinking is ever going to produce bottom-line results. The truth is, your strongest competitors are doing it and while in the short term you may be surviving, your long-term sustainability, profitability and businesses value depend on it.
Do you have small business questions you would like answered about this article or others? Please visit www.VRWindsor.com or call 519-903-7807.
William Sivell is a sales representative of VR Windsor Inc., Business Brokerage; his blog appears every Tuesday.