5 Ways To Increase Your Business Value

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At the end of our 12th year in business, we decided to have it valued. It took a lot of courage to let someone put a number on this company we had invested so much of our lives in.  To our disappointment, the number we received from the business broker did not reflect 12 years of blood, sweat, and tears. It wasn’t even close.

We didn’t want to just keep the doors open and the lights on; we wanted to find a way to increase the market value of our company tangibly and aggressively.  We were determined to change the course of our company, so we got busy and turned our focus to “working on the business”, instead of “working on the business”.  In a matter of 3 years, we increased the value of our business by ten times by embracing these five key things.

1. Be proud of making money

Reality is, if a business does not make money, it cannot continue to exist.  Let all your employees in on how your business makes money and how making money benefits everyone in the company.  Provide tools for managers and teams to measure profitability throughout the year. This will allow your employees to think about ideas of how to make and keep more money.

2. Replicate yourself

Delegate and train others to replace you.  Intentionally grow your key people by taking an hour or two to meet and mentor them.  Schedule weekly or bi-weekly meetings to interact on topics like management techniques, leadership, handling employees, and business growth. Include your organization’s leaders in your business strategy and planning meetings so they have input on where the organization was headed.  This will allow the leaders in your organization the chance to participate in the growth of the company and they will become personally invested in the future of the company.

3. Create and nurture a culture based on shared values

Talk to your employees about your company values constantly – with individual employees, in small groups, and in company-wide meetings.  Communicate to your team how your values guide your business decisions, so they understand the reason decisions are made the way they are.  This shared standard will create an organization operating from a common foundation. Decision making will become easier and more consistent.  Quality will improve. Your values will cease to be simple platitudes; they’ll evolve to be the standard by which everything is measured. And the difference that makes in your organization will be tangible.

4. Cultivate a marketing mindset throughout the organization

The individuals who do the work are typically the ones who know your business the best.  So instead of trying to hire a sales person to “sell” your business, consider having your employees who know your company partake in marketing initiatives like drafting up marketing offers, helping with marketing execution, or taking proposal calls.  Instilling a marketing mindset in everyone in your company will give your employees the opportunity to grow and contribute to the success of the company.
 

5. Plan for growth before it comes

Prepare yourself, your company, and your employees for growth.  Review your company core systems and examine if they could efficiently handle multiples of current volumes; any system that can’t should be reevaluated.  By doing this, you’ll minimizing growth pains, create structure, and establish a clear vision of what it will look like as you grow.

In the last 3 years, we transformed our company into a “growth” organization.  Our company grew from 10 employees to 30 employees with virtually no turnover; core values were clarified and recognized by employees, creating a high-performance culture.  Revenue nearly tripled in three years; gross margins improved from 35% to 45%; average days to collect decreased from 27 to 23.  New marketing programs improved market awareness from 20% to 80% in three years and increased annual proposals from 80 to 250, or one per every business day of the year.  The financial result of the business’ transformation through these five key changes was a 10x increase in the value of our company.  

FinancialMatthew Pohl