The New Year will be here very shortly and now is a good time to start planning in advance how to build the value of your business during 2018. Most baby boomer entrepreneurs will will set business goals that focus on achieving certain revenue and profit goals. However, if you want to make your business more valuable in 2018, you should resolve to doing some or all of the following during the upcoming year:
- Systemize your business operation and document at least one process per month for others to follow. By doing this consistently a little bit at a time, it makes the task of writing down detailed procedures less arduous, and makes more certain that business activities are done properly without you having to closely supervise and monitor. Resolve to document at least one system per month and by the end of the year you’ll own a more valuable and salable company.
- Begin to gradually offload customer/client relationships to others in in the company. Without doing this, your growth potential is limited. Moreover, this can be a liability in the eyes of an acquirer, which is why you should wean your customer/clients away from relying on you as their primary point person. By the time you sell, none of them should think of you as their relationship manager.
- Create a recurring revenue stream. Companies are more valuable if they can look into the future and expect ongoing revenues. Recurring revenues models can vary from charging fees for certain levels of service to offering a warranty or service contract.
- If you depend upon suppliers for producing a product, be certain you don’t have an over-reliance on one or two suppliers, which can create a liability for your business. By spreading some of your supply orders to other suppliers, you keep your primary sources more competitive, and can make a case to an acquirer that you are secure in your sources of supply for critical needs.
- Checkup your company’s facility lease as well as all other key contractual obligations. Potential buyers will want to review and understand these contracts to make certain of what they might be assuming. Having these documents buttoned down and available will avoid possible negative surprises at the eleventh of selling your company. Also, make sure that the contracts would survive the change of ownership of your company. Consult your attorney if necessary.
- Start tracking your Net Promoter Score (NPS), which is a methodology that measures customer/client loyalty. Loyalty is powerful. It impacts financial performance, such as increased market share, higher revenues, and lower costs. Strategic buyers and private equity companies use NPS as away to measure the health of their acquisition targets during due diligence.
- Get your Value Builder Score, which is a benchmark of where you’re at today with regard to your company’s attractiveness for being acquired. It also pinpoints which areas of your business are dragging down your company’s value.
It takes a lot of lead time to strategically enhance your business salability and maximize the value of your business for ensuring your financial security beyond the business. However, by resolving now to plan how during the New Year, you’ll be able to accomplish a lot during 2018’s twelve months.
Please CLICK HERE to contact me directly about how to make a your company more valuable and sellable.