How to boost company value
Whether you are starting or currently running a business, it is important to take steps to build value into your business operations. If you want to get top dollar when it comes time to sell, consider every major decision and how it will add value to your company’s exit plan. Below are nine value-add strategies that any business can implement.
Build value by. . .
- Having a clear mission and vision for your company. If you don’t know why your business exists or where it’s going, it is hard to create value.
- Leveraging business strengths to create a unique competitive advantage. Determine what you do best and build upon those strengths to develop your unique selling proposition.
- Creating a strong brand identity. Companies with strong brand identities serving niche industries tend to be more valuable than companies serving a broad target market.
- Building customer concentration while diversifying your customer base. Build market share within a diversified customer base. In other words, don’t put all your eggs in one basket. Don’t allow a single customer to control a significant portion of your sales.
- Developing systems and standard operating procedures. By developing operating systems and implementing them through documented procedures you will improve the overall performance of your business.
- Building competitive barriers to entry. Obtaining exclusive rights, trademarks and patents to products and services will add a higher price to your business.
- Developing a capable management team. Your business should be able to run smoothly without your presence.
- Planning for the future. Have a renewable strategic operating plan that addresses your company’s future growth, but also manages today, today.
- Planning for financial returns
- Keep detailed books. Bring in the professionals and ensure your business financials are audited.
- Build a solid performance history over time. Consistently Increasing revenues year over year make for a great growth story.
- Develop recurring revenue streams. Products or services that are needed on a regular basis rather than a one-time occurrence have a greater impact on long term revenues.
- Consistently improve cash flow. Cash flow is the main measurement for company valuation when it comes time to sell your business.
- Keep debt low – the most effective way to build value is to keep debt low.
- Focus on the bottom line. Are all products and services profitable.
Contact me today to learn more about strategic operating plans and how one could help your company build value.