As your business matures and grows, you may start to think about how you plan on moving towards a significant end goal: selling your company. Whether you are in products or services, every business has to decide on an exit strategy. Will you sell your business to a family member so the business can continue to grow? Will you bring in investment capital to expand? Will you sell to a competitor as part of a merger and acquisition? Or will you someday simply close the shutters and turn off the lights?
Many companies will only look at the revenue goals and inventory or client list. There is a misconception that only companies with inventory are worth purchasing. There is an even broader misconception that, if you are in the services industry and do not have a tangible asset, you do not have something worth buying. Regardless of whether your company sells widgets or ideas, you may already have business value - you just have not yet recognized it as having worth. Regardless of your current situation, here are ways to re-frame how you see your business value.
Processes make your company efficient
A scientific process, with documentation that can be accurately followed, is a repeatable process. Processes that are repeatable, and allow a company to achieve consistent results, take the guesswork out of efficiency and growth. When you have a formula, you can take out chance and become more effective at repeating the formula for success.
There are things you most likely do for your company every day that you consider SOP and obvious. For most new entrepreneurs, some of these pieces of common knowledge are not always so common. No matter how small the process, take the time to set up a process document that catalogs what you do, how you measure it, and what your standard results are. When it comes to value, having a proprietary process that demonstrates easily repeatability is gold for a potential buyer.
Contacts make your company known
If you go beyond sales and revenue in your company, the next best source of income and business are your company contacts. By having a large pool of contacts (different from purchased lists), you have a community of individuals who know and respect you as well as your company. This list goes beyond a B2B engagement. Each individual can provide introductions, be a champion for work, and give your organization a foot in the door of a potential client.
Many companies forget their community and the way in which those contacts within their business provide assistance, new project work, and reputation building every day for those companies. The contacts can bring in consistent sales through referrals. These contacts become champions for your company’s growth, and growth equates to revenue. Increased revenue is a clear value-add.
Talent makes your company resource-rich
Whether you have employees, subcontractors or freelancers, that talent pool of team members can go through a rubric and be evaluated at the end of each project to make sure they are bringing value to your company and your clients.
Companies today can also leverage talent across the globe, so that your team members can include some of the best and brightest minds from anywhere they currently are located. You may need reminders that if you want to see value in that talent pool, you have to remove yourself from that pool. Your job, on top of running day-to-day operations, is to grow your company and bring in amazing talent to do the work. This is the hardest idea to implement, but the real value lies in the team you build to serve your clients.
Leadership makes your company progress
One of the ways a member of the executive team can increase the company’s value is by being a thought leader and expert in their respective industry. A leadership role can be demonstrated in different ways, including providing expert advice, mentorship of up-and-coming individuals, teaching or lecturing at an industry event, and volunteering for a board position with an industry panel or association.
For example, are there voluntary board positions in your industry associations or in universities in your area where you can help mentor and guide the next group of professionals entering the industry? This experience of working with rising talent will help you become a better leader and more in tune with emerging issues. Leaders can also prompt discussions around these issues, leading to the industry doing better in the long run.
Take stock in the non-monetary value that you already have put into your company. Your organization is more than just your bottom line – it includes intangible assets that have made your company what it is today. All the experience and relationships you bring to the equation are unique to you and your company, and more valuable than you may think.
Lisa Apolinski is an international speaker, digital strategist, author and founder of 3 Dog Write. She works with companies to develop and share their message using digital assets. Her latest book, Persuade With A Digital Content Story, is available on Amazon. For information on her agency’s digital services visit www.3DogWrite.com.