Structured to Sell
Structured to Sell: Creating a Valuable Business
And how to effectively create and implement change.
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A business becomes more valuable to the owner when it fits their lifestyle and makes them money. A business becomes more valuable to others when it’s easier for a potential buyer to visualize how it will make them money. Having systems and procedures in place increase the value to everyone. After all, you wouldn’t want to buy a company from someone who has all of the operating knowledge in their head, would you? Or from someone who has a magic touch and just seems to make things happen? Not a smart move.
Ask yourself, what would happen if I step out of the business for 1-2 weeks? Would the major operating functions be covered? Or is there a key employee that carries the knowledge? What happens if they leave?
Getting there doesn’t happen overnight but here are the top three areas to consider today to create more profit in your business:
Profitability: Financial books must be organized, accurate, and ready for reporting. You should be able to trust the numbers and form assumptions about trends from the past so that you can better predict the future. Know what your profitability is per product or service and how they fit into your budget and plans for growth. Testing and measuring are your best friend.
Predictability: Important processes and procedures must be documented and easy for another to take over. The benefits of this step not only add value when you sell but allow you to easily see where a tweak to the process could lead to better results. Setting a standard level of service or product, ease of training, and more internal employee advancement create for better work environment for everyone. Customers are taken care of and employees and their growth are synonymous to that of the business.
Longevity: Planning paves the way for growth and big goal achievement. What direction is the organization headed and what actions are being taken to get you there? Create sustainable revenue streams and diversify to outlast an economic downturn or disrupters to your niche. Create products and services that solve problems in a different way than everyone else.
Ideally, the business should be running on its own with only strategic oversight from the managers and owners. Rather than spending time IN the business, you should be spending more time ON your business.
Not sure where to start? There are key questions to ask yourself when you want to create change in any area of life or business.
- Where are we right now? Create a baseline assessment of the current situation. If you can’t trust the information coming out of this step then you have your first priority.
- Where do we want to be? What is the big picture? Get really big here and think about the end game. Where do you want to be and what would you like to have achieved? Get personal on this step so that you can understand your motivations with your business.
- How are we going to get there? Set one or two goals. Create your strategies and the actions that you take every day, every week, and every quarter to get to the goal. These are the priorities that bring the most value for your time investment. Consider setting bigger goals than you think are achievable. Be sure to revisit your plans and assess if you are on track or not and why that happened or did not happen.
- How can we be better? With a clear understanding of what you have to work with and what makes the biggest impact towards where you want to be you can begin to optimize. Automate with software that more efficiently gathers data or triggers workflows. Document a tedious but frequent and important procedure. Evaluate and restructure a process to better utilize team members and reduce wasted time. Delegate tasks to make room for more highly skilled ones.
Not interested in selling? Creating structure and more profit in your business isn’t just for those looking for the exit sign. Taking these steps at any stage creates a more satisfying experience (and PROFITABLE business) for you, your team members, and your customers.
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