The value of any small business is determined by a number of factors. Looking beyond what you believe someone will pay the business and how you can grow profitability and systems will increase your personal wealth and longterm value.
The value to a potential business buyer can be summarized as follows:
A good customer base.
Happy customer’s with re-occurring sales and revenue adds value and a sale to a new owner alot easier transaction. A business that has a loyal customer base and great brand recognition means a new owner can be assured that it’s investment and sales revenues are assured into the future. The less risk of loss of revenue the greater the value a new owner will pay for the business.
Start the new financial year off promoting one of your best loved products or services.
Building value can be best done by working on known winner’s. Enhance the products you know customers like and that sell well. Offer a new and improved products and retire old models.
Happy staff and management.
If you as the owner us the business then is the value in you. Take care to develop a team that can run your business without you. Not only is it great for a new owner to take over a well oiled team it means continuity for the buisiness and assurance for staff employment. A business is not a true business if its just you.
Great systems makes life easy for the next owner.
Mc Donalds use to have a big black book listing every procedure need to run a macas. We should all do the same. Oh it helps with staff understanding your way and gives the business clarity for its day to day operations. Imagine presenting to a new owner a book that outlines how to run your business. What tp do when where amd why. Its value that is worth heaps to a the busimess and its new owner.
Brand and your future
Develop a brand. A brand is more than a logo. It is the businesses sole. It’s why customers love you and why your staff have pride in way they work for you business. Brand takes work and a consistent message to your customers, staff and your community.
Your future value is just as much about the dollars as it is about the bottom line. It is also about the look and feel of your business! Take the time to get it right and the return on your profit will be measured in many ways than the ultimate sale price calculated on a profit formula.
Covid will it impact ?
The impact of Covid on our economy will be felt by most if not all of us who operate a business in Australia and worldwide . Will the Covid19 crisis be an impact or an opportunity? If you are strategic you will work on a developing plan to improve your business. It is easy with doom and gloom to go with the flow and feel the pain But you must do more . Get uncomfortable and enter the new zone.
Selling business in this enviroment will be hard.
Here are 5 things you can do to help your business:
- Reach out to your customers – do it now not in six months time
- Clean up the dead wood – get ride of the anchors in the business that are weighing it down
- Look to the future and plan – feel envigorated
- Reassure and support staff – get the team on the bus so the wheels go around and round!
- Plan , plan and more planning then Action
What will be the hardest thing to do next ? For many small businesses its mindset and getting started . Don’t be afraid to reach out . Look beyond , plan and engage . Cranking up your effort to connect with your own customers will ensure you have a fighting chance. It wont be easy but it will be harder later if you do nothing . Now is the time to help make your business shines.