Top 10 Questions To Start Thinking About Value Enhancement / by Kerri
Wherever you are in your company lifecycle, start thinking now about the value of your company in the marketplace.
If you are a fast-track startup, showcasing your value and tracking your increasing value will make you a very attractive investment opportunity when you seek growth capital. If you are an established firm, clearly understanding the value you bring to the market will help position you as the most appealing acquisition/buy candidate in your space.
Value enhancement is not just a cleanup effort before the buyer’s appraiser comes in in the transaction process. Value enhancement is an overarching strategy to build a stronger, more robust company.
Here are 10 key questions to think through to maximize the value of your business.
- Who are your top 10 most profitable customers? Look at your 80/20 split.
- Who (what other customer) can move into your top 10 – if a client moves on/stops ordering?
- What new product or service could you add, break out as a paid add-on to increase revenue?
- What possibilities have you considered to accelerate your current business?
- Which (if any) of your sales are difficult to collect on? Identify those sales with high internal costs to get paid. Lower-cost orders/sales are less of a burden on the books/balance sheet.
- When do you identify customer complaints? When do you fix them?
- When was the last time you reviewed your pricing structure?
- Do you know who your top 20% of customers are? Why are they your top 20? Do you know your bottom 4%? Do you know what they cost you in time, staff, materials costs and goodwill, etc.?
- How current is your technology? Where should you update or upgrade technology to boost the bottom line?
- In your business model, what % of your sales is tied up as deferred income?
Your answers identify the numbers, activity and results that can provide value enhancement to your business now.