If you are considering selling your business or are looking to grow and expand, consider these tips to maximize the value of your business.
- Consolidate debt. If you pay business expenses with credit cards and regularly carry a balance on these cards, you have added permanent financing to your business that could be costing more than 20% per year. Look into a secured line of credit for a better rate and more flexibility to provide stability with uneven cash flows. If you don’t think you’re getting a good deal, seek out a consultant that will help you position your case to the bank better and will also provide ideas on maximizing the value of your business in other ways.
- Get back to basics. What made you go into business in the first place? Did you decide you wanted to deal with administrative and bureaucratic headaches, or did you have an idea or innovation that you desired to share with the world? Learn to let go of some of the duties of managing your business so that you can run your business. You’re the creative engine behind your business’s current success, keep that engine humming by clearing out the sludge that gets in the way of your (and your business’s) growth.
- Build the team. If you have not done so already, build the team of managers, consultants, and advisors that allows you to delegate with confidence that your final product and business vision will not be compromised.
- Bake a bigger pie. There is some profit and cash flow that can be enhanced by cutting costs. However, long-term growth and prosperity comes from the innovation that grows revenues in excess of growth in costs. Don’t get caught in petty price wars that are a struggle over a particular piece of the pie, but expand your vision to find new markets or complimentary product mixes that deliver greater value to your customers.
- Under-promise and over-deliver. Without a doubt entrepreneurs are an optimistic group of individuals. However, when pitching ideas to potential customers, be impressive but conservative in your estimate of your final delivery. Your customers will be pleasantly surprised and this pleasant feeling may translate into lucrative referrals from these clients in the future. You don’t want to be the guy who makes grand promises and can’t deliver or lose all your profit attempting to deliver your promises.
- Get processes out of your head. You are likely your company’s most valuable asset. However, if too much of that value is wrapped up in your mind, it is hard to sell that value to others. Consider taking one major process at a time and committing it to formal documentation so that when transferring your business you can transfer a business with more value