The pandemic has destroyed many growth plans. Customers staying at home, sitting on their money. Uncertainty the word on everyone’s lips. New working patterns that no-one had planned for.
But this very long tunnel finally has a glimmer of light at the end. The vaccination programme in the UK seems to be going well. Businesses are opening up. People are beginning to head back to their offices. Optimism seems to be rising.
As things improve what better time to turn your mind to your company and how to increase its value. Here are ten top tips on ways to boost the value of your business.
1. Stop chasing revenue.
Just because your company has a healthy bank balance, doesn’t mean it’s going to be more valuable. Yes, money helps, but it doesn’t always mean investors are going to come knocking. Perhaps you are too reliant on one customer or supplier. You may have ignored re-investment into new products and ideas. Your growth may not be sustainable? An obsession with revenue can stop you from seeking out an even more valuable asset – a strong business with a robust, meaningful strategy. That’s what builds value.
2. Sell less stuff to more people.
The most valuable companies tend to sell a few differentiated products and services to many customers. The least valuable businesses sell lots of undifferentiated products and services to a concentrated group of buyers. Less is definitely more.
3. Know your customer.
How well do you know the people you sell to? The answer needs to be – extremely well. And you need to speak to them regularly. The business world is evolving ever faster. What a customer likes one month, they may have gone off the next. New products and services can appear that customers prefer to yours. That‘s why regular feedback is so vital to growing the value of your business.
4. Drop the products or services that depend on you.
If you offer something that needs you to produce or sell it, consider dropping it from your offerings. Services and products that require your involvement can suck up your time and cash and don‘t contribute significantly to your business‘s value.
5. Collect more money up front.
If you offer a product or service that customers value, then it’s only right that they should pay for it upfront. This can turn a negative cash flow cycle into a positive one, boosting your business‘s value and lessening your stress load.
6. Create more recurring revenue.
If your customers buy from you on an ad hoc basis, you‘ll be looking at some sleepless nights. But get those customers to buy through subscriptions or recurring contracts and watch your blood pressure drop. Recurring revenue means less stress in the short-term and a more valuable business over the long run.
7. Be different.
To stand out in ever more crowded markets, you need to be different. Customers expect it. So do investors and potential buyers. However small your point of difference it’s vital that your marketing strategy magnifies it. Be relentless in highlighting this advantage.
8. Find a backup supplier for your most critical raw materials.
Eggs should not all be kept in one basket. A supply chain of one can leave you in a very vulnerable position should things go wrong. That’s why it pays to have at least one backup supplier for any essential raw materials. You may wish to consider placing a small order to establish a commercial relationship and see if an alternative supplier can help you when materials are scarce.
9. Teach them to fish.
As your business grows it doesn’t pay to have you do all the heavy lifting. Answer every employee question of you with one of your own – “What would you do if you owned the business?” Your aim should be to cultivate employees who think like owners so they can start answering their own questions without coming to you. It will also show investors and potential buyers that you’re not a business overly reliant on one person.
10. Create an instruction manual.
Your team should be clear about the processes that drive your business. They should know your purpose, values, your short and long-term strategies and what differentiates you from your competitors. They should feel and act as part of a team.
You may not be looking to sell, or even seeking investment, but what you should be doing is looking to build value in your business. Ask yourself which of these steps you currently have in place.
If you score ten out of ten, congratulations. But if you feel there is room for improvement, then there’s never been a better time to act. Why not start by visiting our BGI Strategy website. We have proven strategies and methodologies to help you build value in your business.