The purpose of owning and operating a business extends beyond making as much money as quickly as possible. Value across the long haul matters just as much as short-term profit. The question is how to enhance the value of your business without significant risk or an egregiously large investment. Let’s take a look at five ways to enhance the value of your business.
1. Be a Contrarian by Replacing Yourself
Display some irreverence for business convention by replacing yourself. You read that right! Eliminate yourself from the picture to gauge how well your business will function if you take a vacation, require medical attention or decide to sell. The bottom line is if your business cannot function without you, it does not have as much value as it should. No business owner should be absolutely essential for operations to function properly. Make yourself fungible and it will send a clear message to your team that the company can grow without you. This is the motivation your team needs to take ownership of their contributions and give their all every single workday.
2. Develop a Recurring Revenue Stream
If your business does not yet have a recurring stream of revenue, it is long past time to develop one. Recurring revenue streams are not as prone to risk as one-off sales. However, it will take some time, money and creative thinking to form a reliable stream of recurring revenue. Find a way and you will be able to sit back and rest easy knowing your business can rake in the cash without constant oversight or innovation. As an example, convincing customers to subscribe to your product or service with a recurring contract will ensure a steady flow of business.
3. Customer Outreach and Quality Control
The best businesses have customer outreach programs. Find out what customers dislike and like about your business, perform ongoing quality control, make the appropriate alterations and your value offering will justify a competitive market rate. The moral of the story is to acknowledge the truth no matter how painful it is. Continue to listen to your customers, enhance your operations based on their feedback and your business will gradually increase in value.
4. Clean up the Books
Cleaning up your company’s books really can enhance the value of the business. Take a close look at your company’s accounting. If your aim is to sell the business in the near future, spend for an audit of the company’s financials. This independent review of the books will provide an honest look at the company’s financial health, making it that much more transparent and attractive to buyers.
5. Offer Something Unique
The average customer looks to the market for a solution to a problem he or she cannot solve in a DIY (do it yourself) manner. Present something highly unique that solves problems or improves customer quality of life in some way and you will always have a customer base. Continue to innovate and offer something different from other industry competitors and your company’s value will steadily climb.
Strive to Enhance the Value of Your Business Every Single Day
Focus on the five ways to improve the value of your business as outlined above and you will gradually notice your company proves more profitable. Perhaps most importantly, your business will prove that much more marketable to prospective buyers. Whether you are looking to sell your business or simply position it better for posterity’s sake, the advice set forth above will help guide you along the way. Pin this article to your vision board, follow these helpful tips and watch the value of your business climb with each passing day.
About the Author:
Marla DiCarlo is an accomplished business consultant with more than 28 years of professional accounting experience. As co-owner and CEO of Raincatcher, she helps business owners learn how to sell their business to get paid the maximum value.