Many business founders build their businesses with the idea of selling them. By thinking with the end in mind, you can build a business that others want to buy. What parts of your business will your potential buyers value?
To maximize your business results during the building stage, you should start creating business systems that allow you to increase sales and profits through all the stages of your business. So how do you increase the value of your business?
I thought it might be helpful to give you a quick quiz to see where to start. I’ve used these questions to help our M&A teams better understand the value of the businesses we look at. These 12 questions give you a great place to start when you’re evaluating a business to buy or sell.
For the business owner who is looking to get the most out of their business when they sell, these questions help you decide where and how you invest your time and money to build a great business. One of the key benefits of building a successful business now is that you get paid twice on your improvements; once in increasing value through sales and profits today and then again when you choose to sell the business in the future. The other advantage my clients tell me they receive is these critical systems make it easier for them to manage their company because it gives them the control they desire.
These questions focus on the two highest impact areas to increase the value of your business; marketing and business development systems. Take this quick audit to see where you stand. It will help you identify where you have value from the buyer’s perspective.
- Do your team members have a clear vision of what you want your business to look like?
- Are your products and services the higher quality alternative?
- Do you have differentiated, innovative products and services?
- Do you use a targeted marketing system based on market, industries, products, or services?
- Do your clients think you have a unique position in your market?
- Do you offer multi-level client support?
- Do you nurture an entrepreneurial company culture?
- Do you have a repeatable sales process and business development system?
- Have your created barriers to entry for future competitors?
- Do your current business partners support your business growth strategies?
- Have you gained access to unique markets and channels of distribution?
- Do you know what your business is worth to a potential buyer?
The first step in creating a more valuable business is to understand your current strengths. Congratulations on all your Yes responses. Use these as a starting point to leverage your business and increase its value. The No responses tell you where you might have possible opportunities. Rather than seeing this as a negative, look at this as your opportunity to skyrocket to new heights in your business.
Its critical to understand how you company grows in value. By creating and implementing better systems you are better able to measure your organization’s progress towards these goals. Over the next several weeks we will share additional ideas on increasing the value of your business.
Tricia and I have a family member in hospice and we are travelling back and forth to make sure she is as comfortable as possible. We should be returning to a normal publishing schedule over the next two weeks. Thank you for your patience.
Originally published at High Growth Business Report.