Why Build Business Value Now? / by Kerri
As the owner of your business, you always have more to do than you have time to do it. You always have more to do than hands to get it all done. So when any of your outside advisors suggests starting early on anything strategic, be it wealth planning, estate planning, contingency planning, long-term tax planning, even goals and strategies to grow your business; the urgency isn’t always obvious.
Compared to product and service delivery, customer satisfaction and controlling costs, it is very challenging to find time to focus on and execute strategic projects and changes to build value into the business. The ROI on the time and effort required to build business value is years if not decades in the future.
Here are a few reasons disguised as incentives that may tempt you carve out the time and commitment to build business value now.
- Start focusing on what will increase business value, not just revenue. This will give you a longer lead-time to leverage and compound that increasing value.
- Prioritize working on the business, specifically to add value. This will lead to stronger results on the top line and the bottom line over time.
- Transfer operational responsibility to your team. This will free you up for more strategic efforts and demonstrate the value of your business is in the business, not tied up in you the owner.
- Build strong deep fundamentals in every area of your business. This will provide proof of what you know the business is worth, adding leverage in any transaction negotiation.
- Timing is everything. Run your company with clean books, up to date governance agreements and documents, with systems and processes in place to drive growth. Consequently, your business will always be ready and will ‘show better’ to any potential buyer (solicited or unsolicited).
When you apply value drivers in every area of your business, consistently reinforce them, and track the impact, then the positive compounding effect on Net Profit and Valuation is dramatic.
That doesn’t happen overnight or by itself. It takes time to build business value so you can harvest the wealth tied up in your investment in your business.
Check out our systematic approach here. Build Your Business Value is a 12 month program to set you up to add value in every area of your business.